<PAGE>
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CalMat Co.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LETTERHEAD OF CALMAT CO.]
April 9, 1998
Dear Stockholders:
You are cordially invited by the Board of Directors of CalMat Co. to
attend the Annual Meeting of Stockholders on Wednesday, May 27, 1998, at 10:00
a.m., in the Golden State Room, at the Omni Los Angeles Hotel and Centre, 930
Wilshire Boulevard, Los Angeles, California. Enclosed with this letter is the
formal Notice of the Meeting and the related Proxy Statement and Proxy Card.
All nominees for election this year are members of the present Board
of Directors. Mr. William T. Huston, who has served as a Director since 1978,
will retire from the Board at the expiration of his term and, therefore, will
not stand for reelection. We acknowledge the many contributions made by Mr.
Huston during his tenure on the Board and thank him for his dedication to the
Company.
Included in the agenda for this year's meeting is a proposal
requesting stockholder approval of the Company's Employee Stock Purchase Plan.
The Plan is open to all employees and provides an incentive to encourage them to
begin or increase their ownership of the Company's Common Stock. Also included
is a proposal requesting stockholder approval of the 1998 Stock Option Plan for
Officers, Directors and Key Employees of the Company.
Please sign, date and return the enclosed Proxy Card in the envelope
provided as soon as possible so that your shares can be voted at the meeting in
accordance with your instructions.
Very truly yours,
/s/ A. Frederick Gerstell
Enclosures
YOUR VOTE IS IMPORTANT
Please Sign, Date and Return Your Proxy Card
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<S> <C>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS.................................. 1
. ELECTION OF DIRECTORS FOR A TERM OF ONE YEAR......................... 2
1998 Nominees for Director........................................ 2
Stock Holdings of Directors....................................... 4
GENERAL INFORMATION ABOUT THE BOARD....................................... 5
Committees of the Board and Director Compensation................. 5
Stock Ownership of Certain Beneficial Owners and Management....... 8
Section 16(a) Beneficial Ownership Reporting Compliance........... 9
EXECUTIVE COMPENSATION.................................................... 9
Report of the Compensation Committee.............................. 9
Compensation Committee Interlocks and Insider Participation....... 12
Employment Agreements............................................. 12
Summary Compensation.............................................. 14
Option Grants for 1997............................................ 15
Option Exercises and Year-End Value............................... 15
Pension Plans..................................................... 16
Performance Graph................................................. 17
. RATIFICATION OF APPOINTMENT OF AUDITORS.............................. 18
. EMPLOYEE STOCK PURCHASE PLAN......................................... 18
Plan Summary...................................................... 18
. 1998 STOCK OPTION PLAN FOR OFFICERS, DIRECTORS AND KEY
EMPLOYEES OF CALMAT CO.............................................. 19
Plan Summary...................................................... 20
. OTHER BUSINESS....................................................... 25
STOCKHOLDER PROPOSALS FOR 1999 PROXY...................................... 25
PROXIES AND VOTING AT THE MEETING......................................... 25
EXHIBIT "A" - "CALMAT CO. EMPLOYEE STOCK PURCHASE PLAN"................... 27
EXHIBIT "B" - "1998 STOCK OPTION PLAN FOR OFFICERS, DIRECTORS AND
KEY EMPLOYEES OF CALMAT CO."............................................. 36
</TABLE>
. Indicates items to be voted on at the Meeting.
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
[LOGO OF CALMAT CO.]
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: Wednesday, May 27, 1998
Time: 10:00 a.m.
Place: Golden State Room
Omni Los Angeles Hotel and Centre
930 Wilshire Boulevard
Los Angeles, California
At the Annual Meeting, the following items will be on the agenda for action by
the stockholders:
. TO ELECT TWELVE (12) DIRECTORS TO SERVE DURING THE ENSUING YEAR AND UNTIL
THEIR SUCCESSORS ARE ELECTED OR APPOINTED;
. TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
AUDITORS;
. TO CONSIDER AND ACT UPON A PROPOSAL THAT THE STOCKHOLDERS APPROVE THE
COMPANY'S EMPLOYEE STOCK PURCHASE PLAN;
. TO CONSIDER AND ACT UPON A PROPOSAL THAT THE STOCKHOLDERS APPROVE THE 1998
STOCK OPTION PLAN FOR OFFICERS, DIRECTORS AND KEY EMPLOYEES OF CALMAT CO.;
AND
. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
These items are more fully described in the following pages. Stockholders of
record at the close of business (5:00 p.m., Pacific Standard Time) on April 8,
1998, are entitled to one vote for each share held. A list of these
stockholders will be available for inspection during the ten days preceding the
meeting, at the corporate offices of the Company, at 3200 San Fernando Road, Los
Angeles, California 90065, during normal business hours. The list will also be
available for inspection at the Meeting.
By order of the Board of Directors,
PAUL STANFORD
Secretary
Los Angeles, California
April 9, 1998
This Proxy Statement and its accompanying form of Proxy Card are being mailed
beginning on or about April 9, 1998 to stockholders entitled to vote. The
CalMat Co. 1997 Annual Report, which includes Financial Statements, is being
mailed with this Proxy Statement. A copy of the Company's Annual Report on Form
10-K will be provided without charge to stockholders upon request to the Company
at 3200 San Fernando Road, Los Angeles, California 90065, Attention: Paul
Stanford, Secretary, (213) 258-2777. The Form 10-K is also available on the
Company's website at http://www.calmat.com. For more information, the Company
may be contacted by e-mail at [email protected].
1
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
. ELECTION OF DIRECTORS FOR A TERM OF ONE YEAR
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING DIRECTORS OF THE
COMPANY FOR A TERM OF ONE YEAR.
Each of the nominees for director named below is a member of the present
Board of Directors. Mr. William T. Huston, who has served as a Director since
1978, has reached mandatory retirement age pursuant to the Company's By-laws and
will not stand for reelection. Should one or more of these nominees become
unavailable to accept nomination for election as a director, the individuals
named as Proxies on the enclosed Proxy Card will vote the shares that they
represent for the election of such other person or persons as the Board may
recommend, unless the Board reduces the number of directors.
1998 NOMINEES FOR DIRECTOR
JOHN C. ARGUE. Of Counsel to the Los Angeles law firm of Argue Pearson
Harbison & Myers where he has worked since 1972. He has practiced law
since 1957. Mr. Argue is a Director of Avery Dennison, Inc., and
Nationwide Health Properties, Inc. He is a Trustee of TCW Funds, Inc., CVT
and Apex Mortgage Capital, the TCW/DW Family of Funds and Term Trusts 2000,
2002, 2003 and also serves as Chairman of The Rio Hondo Memorial Foundation
and of the Advisory Directors of LAACO, Ltd.
ARTHUR BROWN. Chairman of the Board, Chief Executive Officer and President
of Hecla Mining Company ("Hecla"), producers of gold, silver, lead, zinc
and industrial minerals. Prior to being named President in 1986, Mr. Brown
served as Hecla's Chief Operating Officer and Executive Vice President in
addition to various other positions as an officer of Hecla. Mr. Brown is
also a Director of Southern Africa Minerals Corporation, American Colloid
Company and Idaho Independent Bank.
DENIS R. BROWN. President and Chief Executive Officer, since 1994, of
Pinkerton's, Inc., a global provider of total security services. From 1990
to 1993, Mr. Brown was Chairman and Chief Executive Officer of Concurrent
Computer Corporation. Mr. Brown is a Director of Pinkerton's, Inc. and
Farr Company.
HARRY M. CONGER. Chairman of the Board, since 1982, of Homestake Mining
Company ("Homestake"), an international company engaged in gold mining and
related activities. Mr. Conger was also Chief Executive Officer of
Homestake from 1982 to 1996. From 1978 to 1982, he was President and Chief
Executive Officer of Homestake. Mr. Conger is a Director of ASA, Ltd.,
Pacific Gas and Electric Company, Apex Silver Mines and the National Mining
Association. He is also a Trustee of the California Institute of
Technology. Mr. Conger retired as a Director of Baker Hughes, Inc. in 1997
and was Chairman of the World Gold Council from 1995 to 1997.
RAYBURN S. DEZEMBER. Serves on the boards of Wells Fargo & Co. and Wells
Fargo Bank and Tejon Ranch Co. Mr. Dezember is also a Director of The
Bakersfield Californian and Bolthouse Farms. He served as Chairman of the
Board and Chief Executive Officer of Central Pacific Corp. from 1981 to
1990. He is also a Trustee of Whittier College.
2
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
A. FREDERICK GERSTELL. Chairman of the Board and Chief Executive Officer
of the Company. From 1984 to 1988, Mr. Gerstell was President and Chief
Operating Officer of the Company. In 1988, he was elected Chief Executive
Officer and, in 1991, he was elected Chairman of the Board. From 1981 to
1984, he was President and Chief Operating Officer and a Director of
California Portland Cement Company ("CPC"), a predecessor constituent
company, and, prior to 1981, a Vice President of CPC. Mr. Gerstell is also
a Director of Ameron, Inc.
RICHARD A. GRANT, JR. Private investor and Co-Trustee of M. B. Scott
Trusts. Mr. Grant is also a Co-Trustee of the P. D. Byrne Trust, which
owns 296,273 shares of the Company's Common Stock. Mr. Grant is also
Secretary, Treasurer and a Trustee of the Dan Murphy Foundation, a non-
profit foundation which owns 3,821,691 shares of the Company's Common
Stock.
EDWARD A. LANDRY. Senior partner of the Los Angeles law firm of Musick,
Peeler & Garrett, where he has practiced law since 1965. The Company
retained the services of Musick, Peeler & Garrett during 1997 and has
retained such services in 1998. Mr. Landry is a Trustee of the Dan Murphy
Foundation, a non-profit foundation, which owns 3,821,691 shares of the
Company's Common Stock. He also serves as a trustee for other non-profit
foundations.
THOMAS L. LEE. Chief Executive Officer, Director and, since July 1989,
Chairman of The Newhall Land and Farming Company, a publicly traded
California limited partnership. Mr. Lee served as its President and Chief
Executive Officer from 1987 to 1989, and as President and Chief Operating
Officer from 1985 to 1987. He also is a Director of Wells Fargo & Co. and
of Wells Fargo Bank, and a Trustee of California Institute of the Arts.
THOMAS M. LINDEN. Private investor. Mr. Linden was Executive Vice
President and General Manager - Properties Division of the Company from May
1985 through May 1989. Before that time, he was a partner with Smith,
Linden and Basso, certified public accountants.
GEORGIA R. NELSON. President, Edison Mission Energy Americas, and Senior
Vice President, Worldwide Operations, Edison Mission Energy, one of the
world's largest independent power producers. Prior to 1996, Ms. Nelson was
Senior Vice President of Southern California Edison. Prior to 1995, Ms.
Nelson was Vice President and Special Assistant to the Chairman and Chief
Executive Officer of EIX (Edison International).
STUART T. PEELER. Petroleum industry consultant and independent oil and
gas producer since the beginning of 1989. Mr. Peeler was Chairman of the
Board and Chief Executive Officer of Statex Petroleum, Inc., from 1982
through 1989 and was its President from 1983 to 1986. Mr. Peeler is a
Director of Chieftain International, Inc., Chieftain International Funding
Corp. and Homestake Mining Company. He is also a Trustee of the J. Paul
Getty Trust.
3
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
STOCK HOLDINGS OF DIRECTORS
The following table shows shares of the Company's Common Stock beneficially
owned by each current director and nominee.
<TABLE>
<CAPTION>
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SHARES OF COMPANY
FIRST STOCK BENEFICIALLY
POSITION WITH BECAME A OWNED AS OF PERCENT
NAME OF NOMINEE AGE COMPANY DIRECTOR MARCH 23, 1998(a) OF CLASS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John C. Argue 66 Director 1990 9,000 (b) *
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Arthur Brown 57 Director 1994 5,750 (c) *
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Denis R. Brown 58 Director 1997 750 (d) *
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Harry M. Conger 67 Director 1981 (e) 12,500 (b) *
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Rayburn S. Dezember 67 Director 1989 11,900 (b) (f) *
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A. Frederick Gerstell 60 Chairman of the Board, 1981 (e) 288,311 (g) 1.20
CEO, and Director
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Richard A. Grant, Jr. 58 Director 1972 (e) 44,000 (b) (h) *
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William T. Huston** 70 Director 1978 9,580 (b) *
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Edward A. Landry 58 Director 1994 8,500 (c) (i) *
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Thomas L. Lee 55 Director 1990 10,500 (b) *
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Thomas M. Linden 54 Director 1978 559,974 (b) (j) 2.35
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Georgia R. Nelson 48 Director 1997 3,250 (d) *
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Stuart T. Peeler 68 Director 1966 (e) 23,500 (c) *
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* Less than 1%
** Mr. Huston will retire from the Board at the expiration of his term, concurrently with the election of directors, at
which time the full Board size will be reduced from 13 to 12 directors.
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</TABLE>
(a) Unless otherwise indicated, the beneficial owner (within the meaning of
the rules of the Securities and Exchange Commission) of the shares shown
has sole voting and investment power, subject to applicable community
property laws.
(b) Of the shares shown, 7,500 are shares that the director has the right to
acquire under the director's stock option agreements.
(c) Of the shares shown, 4,500 are shares that the director has the right to
acquire under the director's stock option agreements.
(d) Of the shares shown, 750 are shares that the director has the right to
acquire under the director's stock option agreements.
(e) Includes service as a director of CPC. Each of these nominees for
director became a director upon formation of the Company in 1984 by the
combination of CPC and Conrock Co.
4
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
(f) Mr. Dezember has shared voting and investment power with respect to 4,400
of the shares shown. The shares are held in a family trust, of which Mr.
Dezember and his wife are Co-Trustees.
(g) Of the shares shown, 274,054 are shares that Mr. Gerstell has the right
to acquire under stock option agreements.
(h) Also, does not include, and Mr. Grant disclaims any beneficial interest
in, the 3,821,691 shares owned by the Dan Murphy Foundation, of which he
is Secretary, Treasurer and a Trustee, and the 296,273 shares owned by
the P.D. Byrne Trust, of which he is a Co-Trustee. Mr. Grant also
disclaims any beneficial interest in the 4,000 shares owned by one of his
children, also not shown, who still shares his household.
(i) Does not include, and Mr. Landry disclaims any beneficial interest in,
the 3,821,691 shares owned by the Dan Murphy Foundation, of which he is a
Trustee, and the 1,868 shares held in the Philip Marlow Trust, of which
he is a Trustee.
(j) Mr. Linden has shared voting and investment power with respect to 191,708
shares of the shares shown. Mr. Linden disclaims beneficial ownership,
except to the extent of his pro-rata pecuniary interest, with respect to
the 187,640 shares held in his name as Trustee of revocable trusts for
the benefit of his children, 141,302 shares held by the R.F. and D.A.
Ingold Trust and 50,400 shares held by the Milton S. and Margaret I.
Linden, of both of which he is a Co-Trustee, and the six shares held by
the Ingold Liquidating Partnership, of which he is a Co-Managing Partner.
GENERAL INFORMATION ABOUT THE BOARD
COMMITTEES OF THE BOARD AND DIRECTOR COMPENSATION
During 1997, the Board of Directors met seven times. Directors who are not
Company employees were paid a quarterly retainer fee of $4,000 for service on
the Board -- $4,500 if the director also served as a Committee Chairman. In
addition, non-employee directors were paid a fee of $1,600 for each Board
meeting and $800 for each Committee meeting attended. Also, at its January 1998
meeting, the Board adopted a resolution to permit directors to borrow interest-
free funds from the Company to purchase up to 1,000 shares per year of the
Company's stock. Such loans, if made, will be repaid within one year through
the retention by the Company of the director's compensation as it is earned.
The Board of Directors has an Audit Committee, an Executive Committee, a
Finance Committee, a Management Development and Compensation Committee, a
Nominating and Corporate Governance Committee and a Property Committee. During
1997, the Audit, Finance, Management Development and Compensation and Property
Committees each met three times. The Executive and Nominating and Corporate
Governance Committees each met once. All directors attended at least 75% of all
meetings of the Board and any Committees on which they served.
5
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
AUDIT COMMITTEE
The Audit Committee recommends the selection of independent auditors and
approves their fee arrangement. The Audit Committee reviews the plan and
scope of the audit and the resulting audit report and management letter.
The Audit Committee also monitors the Company's ethics programs and other
compliance policies, and discusses with management and the outside auditors
the effect of recently issued accounting standards on the Company's
financial statements.
1997 MEMBERS
John C. Argue, Chairman Edward A. Landry
Denis R. Brown Georgia R. Nelson
William T. Huston Stuart T. Peeler
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
The Management Development and Compensation Committee ("Compensation
Committee") approves and recommends to the Board of Directors director
compensation, remuneration for senior management of the Company, and the
adoption of any compensation plans. The Compensation Committee also makes
recommendations to the Board concerning succession planning and management
development policies for the Company. The Compensation Committee's Stock
Option Sub-Committee administers the Company's stock option plans and
approves the granting of stock options or other benefits under such plans.
1997 MEMBERS
Stuart T. Peeler, Chairman* Harry M. Conger*
John C. Argue* Thomas L. Lee*
Arthur Brown* Thomas M. Linden
*Also members of the Stock Option Sub-Committee.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating and Corporate Governance Committee ("Corporate Governance
Committee") recommends to the Board of Directors nominees to fill Board
vacancies, and a slate of nominees for election at the Annual Meeting of
Stockholders. The Corporate Governance Committee establishes criteria for
Board membership, including criteria relating to tenure and age limitation,
and reviews qualifications of candidates for Board membership. The
Corporate Governance Committee also recommends to the Board candidates to
fill vacancies on the Board which occur between annual meetings of
stockholders. In addition, the Corporate Governance Committee monitors
corporate governance practices and makes recommendations for changes when
appropriate, annually reviews the duties and responsibilities of each Board
Committee, and reviews recommendations by the Chairman of the Board for
membership on Board Committees. The Corporate Governance Committee has no
formal procedures for consideration of recommendations for nominees that
may be submitted by stockholders.
1997 MEMBERS
Thomas L. Lee, Chairman Richard A. Grant, Jr.
Harry M. Conger William T. Huston
6
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
FINANCE COMMITTEE
The Finance Committee monitors the performance of investments in the
Company's pension plans and selects and recommends managers, financial
advisors and trustees for pension fund investments. The Finance Committee
also reviews and makes recommendations regarding the capital structure of
Company, specific major borrowings, the Company's debt-to-equity ratio and
the relationship of long-term debt to short-term debt.
1997 MEMBERS
Richard A. Grant, Jr., Chairman Rayburn S. Dezember
Arthur Brown Thomas M. Linden
Denis R. Brown Georgia R. Nelson
EXECUTIVE COMMITTEE
The Executive Committee reviews and makes recommendations regarding
corporate objectives and policies, the Company's long-range plan, major
Company acquisitions or divestitures and the Company's dividend policy.
When necessary, the Executive Committee may act in lieu of the Board of
Directors, exercising all the powers of the Board of Directors in the
management of the business and affairs of the Company, except where limited
by Section 141 of the Delaware General Corporation Law.
1997 MEMBERS
A. Frederick Gerstell, Chairman Thomas L. Lee
John C. Argue Thomas M. Linden
Harry M. Conger Stuart T. Peeler
Richard A. Grant, Jr.
PROPERTY COMMITTEE
The Property Committee oversees the development and disposition of the
Company's real estate.
1997 MEMBERS
Rayburn S. Dezember, Chairman Edward A. Landry
John C. Argue Thomas L. Lee
William T. Huston Thomas M. Linden
7
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following shows information (i) as of December 31, 1997 with respect to
the only persons known to the Company to be the beneficial owners of more than
5% of the Company's outstanding stock, based on the Company's records and a
review of filings made pursuant to Sections 13 and 16 of the Securities Exchange
Act of 1934 (the "Exchange Act"); and (ii) as of March 23, 1998 for the officers
named in this Proxy Statement under the caption "Executive Compensation" and for
directors and executive officers as a group. Unless noted otherwise, beneficial
owners listed have sole voting and investment power with respect to the shares
reported.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Dan Murphy Foundation 3,821,691 shares 16.07
Post Office Box 711267
Los Angeles, CA 90071
- ------------------------------------------------------------------------------------------------------------
FMR Corp. 1,685,200 shares 7.09
82 Devonshire Street
Boston, MA 02109
- ------------------------------------------------------------------------------------------------------------
David L. Babson & Co., Inc.* 1,512,960 shares 6.36
One Memorial Drive
Cambridge, MA 02142-1300
- ------------------------------------------------------------------------------------------------------------
Royce & Associates, Inc. 1,372,300 shares 5.77
1414 Avenue of the Americas
New York, NY 10019
- ------------------------------------------------------------------------------------------------------------
A. Frederick Gerstell 288,311 shares (a) 1.20
Chairman of the Board, Chief Executive Officer and Director
- ------------------------------------------------------------------------------------------------------------
Scott J Wilcott 101,990 shares (a) (b)
Executive Vice President, Law and Property
- ------------------------------------------------------------------------------------------------------------
H. James Gallagher 69,561 shares (a) (b)
Executive Vice President, Finance, Chief Financial Officer
and Treasurer
- ------------------------------------------------------------------------------------------------------------
Paul Stanford 74,695 shares (a) (b)
Executive Vice President, General Counsel and Secretary
- ------------------------------------------------------------------------------------------------------------
R. Bruce Rieser** 2,901 shares (b)
Former President and Chief Operating Officer
- ------------------------------------------------------------------------------------------------------------
Directors and executive officers as a group (21 persons) 1,304,043 shares (a) 5.34
- ------------------------------------------------------------------------------------------------------------
* Includes 2,700 shares for which Babson has shared voting power.
** Mr. Rieser resigned from the Company effective January 27, 1998.
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The amounts shown include the following shares that may be acquired within
60 days pursuant to outstanding stock option grants: A. Frederick Gerstell,
274,054 shares; Scott J Wilcott, 90,464 shares; H. James Gallagher, 61,166
shares; Paul Stanford, 71,750 shares; and all directors and executive officers
as a group, 623,434 shares.
(b) Less than 1%.
8
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
designated Section 16 officers and persons who own more than 10% of the
Company's Common Stock (collectively "Reporting Persons") to file reports of
ownership and changes in ownership of the Company's Common Stock. Reporting
Persons are required by Securities and Exchange Commission regulations to
furnish the Company with copies of all Section 16(a) reports they file.
To the Company's knowledge, based solely on its review of copies of such
reports furnished to the Company and written statements of its directors and
executive officers to the effect that no other reports were required to be filed
during the 1997 fiscal year, all Section 16(a) filing requirements applicable to
its directors, executive officers and 10% owners were complied with, except that
Ms. Nelson filed a late report covering the purchase of 2,500 shares for her
spouse's individual retirement trust account.
EXECUTIVE COMPENSATION
The Executive Compensation section of this Proxy Statement includes (i) the
Report of the Compensation Committee, (ii) a discussion of Employment Agreements
entered into by the Company with certain executives, (iii) a Summary
Compensation Table that shows the compensation paid or accrued to the named
individuals by the Company during the fiscal years ended December 31, 1997, 1996
and 1995, (iv) an Option Grants table and an Option Exercises and Year-End Value
table that show grants and exercises during the last fiscal year with year-end
information regarding outstanding options, (v) a discussion of Pension Plan
benefits in effect for the named individuals for 1997, and (vi) a Performance
Graph of the Company's stock performance during the last five fiscal years
compared to the stock performance of the Company's peer group and others during
the same period.
REPORT OF THE COMPENSATION COMMITTEE
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS OF THE COMPANY
The Compensation Committee is responsible for setting and administering all
policies that govern salaries, salary increases and bonuses for the
Company's executive officers and key managerial employees, for approval by
the Company's Board of Directors. In 1997, the Compensation Committee met
three times.
The Compensation Committee's purpose is to ensure that the Company is able
to attract and retain well-qualified executives who will manage the Company
for the benefit of stockholders and contribute to the Company's success.
The policy of the Compensation Committee is to provide compensation to
executive-level officers that is appropriate to each executive's level of
responsibility, and will both reward the executive for past performance and
provide an incentive to the executive for future performance.
The Compensation Committee also oversees the Management Stock Ownership
Program that establishes guidelines for stock ownership for Company
executives and managers. The ownership
9
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
goals of the Program vary for each level of management and are expressed as
a percentage of the individual's salary.
1997 COMPENSATION AND BONUSES - EXECUTIVE OFFICERS
The primary focus of the Compensation Committee in making its salary
decisions for executive officers in fiscal 1997 was its subjective review
of each executive officer's individual performance. The Compensation
Committee did not establish predetermined performance standards for
executive officers, but rather reviewed each executive officer's individual
performance in the context of the Company's performance. In making this
evaluation, the Compensation Committee considered the earnings performance
of the Company and evaluated whether the specific performance of the area
over which an executive officer had control contributed to the earnings
performance or otherwise supported the Company's overall performance. The
Compensation Committee also reviewed the individual performance of the
executive in the executive's role as a manager and leader within the
Company.
Additionally, as part of its subjective determination of the
appropriateness of salary with regard to an executive's level of
responsibility, the Compensation Committee reviewed salary surveys of
companies within the Company's peer group of twelve U.S. companies within
the sand, gravel, mining and general construction industries. In reviewing
these peer industry surveys, the Compensation Committee primarily
considered the salary being paid to executives with similar
responsibilities in comparable businesses with similar business cycles.
For example, the Compensation Committee especially considered the surveys
of mining companies whose business cycles, like the Company's, are tied to
the construction industry. The Compensation Committee also reviewed
professional surveys of non-industry related companies, primarily in
California, which have comparable revenue, location density in California
and number of employees. In reviewing these non-industry surveys, the
Compensation Committee considered the salary being paid to executives with
similar responsibilities in similarly-sized California companies, with a
heavier focus on Southern California companies, so as to determine
competitive wages within the geographic region. The professional surveys
reviewed include surveys produced by William M. Mercer, Inc., Towers Perrin
and Watson Wyatt. The Compensation Committee did not target any
predetermined relationship between the salaries of the Company's executives
and those of the executives of the surveyed companies. In 1997, the named
executive officers as a group received salaries that were at or above the
mean for executive officers in their peer group, and at or above the mean
for executives within non- industry-related comparable companies in
California.
After its evaluation of these factors, the Compensation Committee
subjectively determined the appropriate salary to be paid.
The Compensation Committee also oversees the Company's bonus plan, which
the Company uses to reward individual employee performance for the prior
year. In January 1996, the Company's Economic Value Added ("EVA/(R)/")
Incentive Compensation Program was adopted to provide key employees with an
incentive based upon increase in stockholder value. All bonuses awarded to
executive officers are now determined based on improvement in EVA/(R)/.
At the beginning of the year, target bonuses, expressed as a percentage of
an executive's base salary, were established using competitive information
obtained from compensation surveys for key positions. Actual bonuses were
determined by multiplying the Target Bonus by a bonus multiple. The
multiple was derived by comparing target and actual EVA/(R)/ for the year,
adjusted
10
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
by a "leverage factor" that reflects the expected variability of the
Company's performance based on historical factors. In 1997, corporate
participants were evaluated based on improvement in EVA/(R)/ for the
Company as a whole, and business unit participants were evaluated based on
improvement in their business unit's EVA/(R)/. A portion of EVA/(R)/
bonuses for certain positions are paid currently, with the balance "banked"
for future payout dependent upon Company performance. EVA/(R)/
calculations are reviewed by independent auditors.
1997 COMPENSATION AND BONUS - CHIEF EXECUTIVE OFFICER
In 1997, the Compensation Committee determined the salary for the Chief
Executive Officer ("CEO") by subjectively evaluating his performance with
regard to the performance of the Company as a whole. The Compensation
Committee did not predetermine performance goals for the CEO, but
subjectively evaluated his performance in the following areas: (i)
establishment of clear and sound objectives; (ii) achievement of those
objectives; (iii) creation of overall management strength; (iv) development
of successor management; and (v) communication with the Board of Directors
and senior management. Additionally, the Compensation Committee considered
particular accomplishments of the CEO in 1997, which have contributed to
long-term stockholder value. Specifically, the Compensation Committee
subjectively evaluated the following accomplishments: maintaining
profitability, success in reducing costs, acquisition and expansion
activities, managing under adverse labor conditions, innovation and
creativity, and improvements in customer service and governmental
relations. In evaluating the CEO's performance, the Compensation Committee
compared the Company's short-term and long-term performance to the short-
term and long-term total stockholder return performance of companies within
its peer group. In 1997, the Company's total stockholder return was below
its peer group as shown on the Performance Graph on page 17. The
Compensation Committee also reviewed the same professional surveys of
industry-related and non-industry-related companies in determining the
CEO's salary level as it did for executive officer compensation. In 1997,
the CEO's salary level was at or above the mean for industry-related
companies and at or above the mean for CEOs within non-industry-related
comparable companies in California. The Compensation Committee did not
evaluate these factors using a predetermined formula, but used its
subjective discretion to reach its result.
In 1997, the CEO's bonus amount was determined based on improvements in
EVA/(R)/ for the Company as a whole. At the beginning of the year, the
CEO's target bonus, expressed as a percentage of his base salary, was
established using competitive information obtained from compensation
surveys for key positions. His actual bonus was determined by multiplying
the target bonus by a bonus multiple. The multiple was derived by
comparing target and actual EVA/(R)/ for the year, adjusted by a "leverage
factor" that reflects the expected variability of the Company's performance
based on historical factors. In 1997, the bonus multiple was 1.14 due to
improved earnings from 1996. The CEO's bonus for 1997 was $362,520, of
which $332,840 will be paid out currently, with the balance payable in
future years under the plan's "banking" feature.
STOCK OPTION GRANTS
The Stock Option Sub-Committee of the Compensation Committee (the "Sub-
Committee"), which is composed of independent directors, met two times in
1997 to determine the amount of any stock options to be granted to Company
employees, including the executive officers and the CEO.
11
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
The Sub-Committee uses the award of stock options to provide an incentive
for continued and future performance of executive officers and other key
employees, as part of their total compensation package.
In making its decisions in 1997, the Sub-Committee subjectively considered
the performance of the Company as a whole and the extent to which the
performance of a particular employee impacted that performance. The Sub-
Committee also reviewed the same professional surveys of industry-related
and non-industry-related companies in determining the amount of any stock
options to be granted to executive officers. Prior to 1997, stock option
grants to all executive officers were well below the mean for executive
officers in their peer group. In 1997, the named executive officers,
including the Chief Executive Officer, received stock option grants that
were above the mean for executive officers in their peer group, and above
the mean for executives within non-industry-related comparable companies in
California.
INTERNAL REVENUE CODE SECTION 162(m)
As one of the factors in its review of compensation matters, the
Compensation Committee considers the anticipated tax treatment to the
Company and to the executives of various payments and benefits. The
deductibility of some types of compensation payments depends upon the
timing of an executive's vesting or exercise of previously granted rights.
Furthermore, interpretations of and changes in the tax laws and other
factors beyond the Compensation Committee's control also affect the
deductibility of compensation. For these and other reasons, the
Compensation Committee will not necessarily limit executive compensation to
that deductible under Section 162(m) of the Internal Revenue Code. The
Compensation Committee will consider various alternatives to preserving the
deductibility of compensation payments and benefits to the extent
reasonably practicable and to the extent consistent with its other
compensation objectives.
Report submitted by the Management Development and Compensation Committee:
Stuart T. Peeler, Chairman
John C. Argue
Arthur Brown
Harry M. Conger
Thomas L. Lee
Thomas M. Linden
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee are present or former
members of management except Mr. Thomas M. Linden, who was Executive Vice
President and General Manager -Properties Division of the Company from May 1985
through May 1989.
EMPLOYMENT AGREEMENTS
The Company has executed the following employment agreements with certain
executive officers according to the terms summarized below:
12
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
The Company has executed employment agreements with Messrs. Gerstell,
Wilcott and Stanford that provide for compensation at an annual rate of
$560,000, $266,400 and $250,000, respectively, for 1998. In addition to
providing benefits in the case of disability, the agreements provide that
the compensation and other benefits (including bonus, retirement plan
contributions and insurance coverages) will continue unabated for the
period specified in each agreement (four years for Mr. Gerstell and three
years for Mr. Wilcott and Mr. Stanford) from the date of notice of
termination by the Company. In the event the Company significantly reduces
the importance of their responsibilities, reduces their compensation or
benefits, relocates the Company's principal executive offices outside Los
Angeles or reassigns them to a location other than the principal executive
offices, each executive's agreement provides that the executive may
terminate the agreement and receive the salary and benefits that would have
been provided to him under the agreement (four years for Mr. Gerstell and
three years for Mr. Wilcott and Mr. Stanford). In the event of a change of
control, the executive may accelerate the exercisability of all options to
acquire shares covered by any outstanding stock option agreements he has
with the Company.
The Company has executed an agreement with Mr. Gallagher with respect to
severance that provides for payment of two years' base salary (determined
as of the date of termination) in the event of termination without cause.
Mr. Gallagher's base salary for 1998 is $258,000. Mr. Gallagher has also
executed an agreement with the Company which provides that compensation and
other benefits (including bonus, retirement plan contributions and
insurance coverages) will continue unabated for three years from the day
preceding any change of control of the Company. In addition, the agreement
provides that in the event of a change of control, Mr. Gallagher may
accelerate the exercisability of all options to acquire shares covered by
any outstanding stock option agreements he has with the Company.
Mr. Rieser resigned from the Company effective January 27, 1998. During
1997, he was employed pursuant to an agreement similar to Mr. Gallagher's,
which provided for two years' base salary in the event of termination
without cause. Upon his resignation in January 1998, he entered into a
Severance Agreement and General Release with the Company pursuant to which
he was paid two years' base salary ($620,000) and a housing allowance
($46,870) and will receive an EVA/(R)/ bonus for 1997 of $162,233.
13
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION
- --------------------------------------------------------------------------------------------------------------------
LONG TERM
ANNUAL COMPENSATION (a) COMPENSATION ALL OTHER
NAME AND PRINCIPAL POSITION ----------------------------------------------------- COMPENSATION
NUMBER OF ($) (c)
SECURITIES
YEAR SALARY BONUS UNDERLYING OPTIONS
($) ($) GRANTED (#) (b)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A. FREDERICK GERSTELL 1997 $530,000 $332,840 84,400 $101,357
Chairman of the Board, Chief 1996 $500,000 $ 79,000 53,400 $ 91,798
Executive Officer and Director 1995 $485,000 $100,000 40,000 $ 93,030
- -------------------------------------------------------------------------------------------------------------------
SCOTT J WILCOTT 1997 $257,400 $ 98,842 24,000 $ 53,171
Executive Vice President, 1996 $247,500 $ 75,000 15,000 $ 45,605
Law and Property 1995 $240,000 $ 32,500 15,000 $ 45,098
- -------------------------------------------------------------------------------------------------------------------
H. JAMES GALLAGHER 1997 $245,000 $102,573 29,000 $ 62,433
Executive Vice President, 1996 $230,000 $ 24,000 15,000 $ 39,557
Finance, Chief Financial Officer 1995 $220,000 $ 30,000 15,000 $ 39,560
and Treasurer
- -------------------------------------------------------------------------------------------------------------------
PAUL STANFORD 1997 $240,000 $100,480 24,000 $ 65,400
Executive Vice President, 1996 $230,000 $ 20,000 15,000 $ 40,553
General Counsel and Secretary 1995 $220,000 $ 30,000 15,000 $ 40,514
- -------------------------------------------------------------------------------------------------------------------
R. BRUCE RIESER* 1997 $310,000 $162,233 39,000 $207,901
President and Chief Operating 1996 $267,200 $ 31,000 40,000 $ 45,926
Officer 1995 $175,000 $ 32,750 35,000 $ 884
- -------------------------------------------------------------------------------------------------------------------
* Mr. Rieser resigned from the Company effective January 27, 1998.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Amounts shown include cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers.
(b) 1995 options granted in January 1996 are shown in 1995 and not included in
1996.
(c) The amounts shown in this column for the last fiscal year include the
following items: (i) Mr. Gerstell: $20,500 - Company accrual to the Thrift
and Profit-Sharing Retirement Plan and Money Purchase Pension Plan for
Employees of CalMat Co., a defined contribution plan (DCP); $71,317 - paid
by the Company to a trust for the Non-qualified Deferred Compensation Plan
for Selected Executives of CalMat Co., a non-qualified defined contribution
plan (NDCP); and $9,540 - Company-paid term life insurance (TLI); (ii) Mr.
Wilcott: $20,500 - Company accrual to DCP; $24,720 - Company accrual to
NDCP; $1,101 - Company-paid TLI; and $6,850 - Company-paid split-dollar
insurance; (iii) Mr. Gallagher: $21,200 - Company accrual to DCP; $21,038 -
Company accrual to NDCP; $480 - Company-paid TLI; and $19,715 - Company-
paid split-dollar insurance; (iv) Mr. Stanford: $20,500 - Company accrual
to DCP; $21,156 - Company accrual to NDCP; $691 - Company-paid TLI; and
$23,053 - Company-paid split-dollar insurance; and (v) Mr. Rieser: $20,500
- Company accrual to DCP; $33,298 - Company accrual to NDCP; $510 -
Company-paid TLI; $125,561 - Company-paid relocation-related expenses;
$2,841 Company-paid housing allowance; and $25,191 - Company-paid split-
dollar insurance.
14
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
OPTION GRANTS FOR 1997
- ---------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR GRANT DATE
OPTIONS TO EMPLOYEES BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (#) (a) IN FISCAL YEAR ($/SHARE) (b) DATE ($) (c)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A. Frederick Gerstell 84,400 21.04 $25.875 11-24-07 $655,298.48
- -------------------------------------------------------------------------------------------------------------------------
Scott J Wilcott 24,000 5.98 $25.875 11-24-07 $186,340.80
- -------------------------------------------------------------------------------------------------------------------------
H. James Gallagher (e) 5,000 1.25 $18.000 03-24-07 $ 21,602.00
24,000 5.98 $25.875 11-24-07 $186,340.80
- -------------------------------------------------------------------------------------------------------------------------
Paul Stanford 24,000 5.98 $25.875 11-24-07 $186,340.80
- -------------------------------------------------------------------------------------------------------------------------
R. Bruce Rieser 39,000 (d) 9.72 $25.875 11-24-07 $302,803.80
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Options granted are exercisable from the first anniversary of the grant
date, at which time 25% of the shares granted becomes exercisable, with an
additional 25% of the option shares becoming exercisable on each successive
anniversary date and full vesting occurring on the fourth anniversary date.
The option term is ten years; however, unless modified by the Stock Option
Subcommittee of the Compensation Committee, no option that is unexercisable
at termination of employment will become exercisable.
(b) The exercise price may be paid by cash, by delivery of shares of the
Company's Common Stock owned by the optionee, or, with consent of the
Compensation Committee, by delivery of a full-recourse promissory note.
(c) The Modified Black-Scholes Option Valuation Model modifies the Black-
Scholes formula to include the impact of cash dividend payments and the
right to exercise options prior to maturity. The volatility factor, risk-
free rate of return and the Company's dividend yield at the November 25,
1997 grant date used in the modified model were 28.21%, 5.84% and 1.55%,
respectively. At the March 25, 1997 grant date, the same factors were
19.53%, 6.71% and 2.22%, respectively. The model assumes that options are
exercised approximately 4.75 years from vesting, based on analyses of
historical exercise patterns for all optionees.
(d) Because of Mr. Rieser's resignation from the Company effective January 27,
1998, the option granted to him in 1997 will not vest or become
exercisable.
(e) Mr. Gallagher received two grants for 1997: 5,000 option shares were
granted for exceptional performance in March 1997 and 24,000 shares were
granted in November 1997.
<TABLE>
<CAPTION>
OPTION EXERCISES AND YEAR-END VALUE
- ----------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING IN-THE-MONEY
SECURITIES VALUE REALIZED UNEXERCISED OPTIONS OPTIONS
ACQUIRED AT DATE OF AT FY-END (#) AT FY-END ($) (b)
NAME ON EXERCISE (#) EXERCISE ($) (a) -------------------------- --------------------------
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A. Frederick Gerstell ----- ----- 299,641/169,450 $1,833,329/$1,003,025
- ----------------------------------------------------------------------------------------------------------------------
Scott J Wilcott 2,946 $ 23,638 129,304/52,750 $ 825,998/$332,063
- ----------------------------------------------------------------------------------------------------------------------
H. James Gallagher 12,084 $105,672 56,166/57,750 $ 538,629/$387,438
- ----------------------------------------------------------------------------------------------------------------------
Paul Stanford 10,000 $ 87,500 68,000/52,750 $ 523,313/$332,063
- ----------------------------------------------------------------------------------------------------------------------
R. Bruce Rieser ----- ----- 23,750/90,250 $ 230,938/$585,813
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Market value of the underlying securities at exercise date minus the
exercise price of the options.
(b) Market value of the underlying securities at year-end minus the exercise
price of in-the-money options.
15
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
PENSION PLANS
Under the Supplemental Executive Retirement Plan ("SERP") in effect for
1997, Messrs. Gerstell, Wilcott, Gallagher and Stanford would receive, upon
retirement, a supplemental benefit added to amounts received from Social
Security, the DCP and the NDCP. Because of Mr. Rieser's resignation in January
1998, he is no longer eligible to receive a benefit under this plan.
The formula for the net SERP benefit is equal to the "SERP Target Percent"
(65% for Mr. Gerstell and 60% for all other named executives) multiplied by
"Final Average Earnings" at retirement reduced by the level annual benefits
provided by the employer contributions to the Qualified and Non-qualified
defined contribution plans and one-half of the actuarial equivalent of the
estimated Social Security benefit. "Final Average Earnings" is defined as the
highest compensation for three out of the last five calendar years of
employment. Compensation includes total cash compensation paid to the
executive.
The estimated annual net SERP benefit for the following executive officers
are: Mr. Gerstell -$446,791; Mr. Wilcott - $21,404; Mr. Gallagher - $272,298;
and Mr. Stanford - $214,173. The Estimated Annual Net SERP Benefit is based on
the following assumptions: interest on defined contribution balances and
conversion of account balances to annuities - 7%; salary increases - 6.5%;
mortality - 85% of 1983 group annuity mortality; Social Security wage base
increases - 3%; retirement - at age 62; and future employer contributions to
defined contribution plans - 15% of base compensation.
16
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's Common Stock with the cumulative total return of the Standard & Poor's
500 Stock Index (the "S & P 500") and a composite industry index (the "Industry
Index") consisting of seven public companies in the building materials
industry.* The graph assumes that $100 was invested on December 31, 1991 in each
of the Company's stock, the S & P 500 and the Industry Index, and that all
dividends were reinvested.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG CALMAT CO., S&P 500 INDEX AND PEER GROUP
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period S&P AVERAGE OF
(Fiscal Year Covered) [CALMAT] 500 INDEX COMPOSTE
- ------------------- -------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-12/31/92 $100 $100 $100
FYE 12/31/93 $96.12 $109.98 $138.90
FYE 12/31/94 $80.30 $111.36 $114.20
FYE 12/31/95 $86.40 $152.83 $140.50
FYE 12/31/96 $90.56 $187.49 $163.10
FYE 12/31/97 $137.14 $249.53 $286.80
</TABLE>
* Industry Index includes Florida Rock Industries, Granite Construction,
Inc., Lafarge Corp., Martin Marietta Materials, Southdown, Inc., Texas
Industries, Inc., and Vulcan Materials Co. Information for Martin Marietta
Materials begins in 1993 when such information first became publicly
available. CalMat Co. is the only company, when compared against companies
in the Industry Index, whose primary market area is Southern California, an
area that has experienced a severe recession affecting the construction
industry throughout much of the period depicted in the Performance Graph.
17
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
. RATIFICATION OF APPOINTMENT OF AUDITORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ITS
APPOINTMENT OF AUDITORS.
The Board of Directors has appointed the firm of Coopers & Lybrand L.L.P.,
independent accountants, to be CalMat Co.'s auditors for the year 1998 and
recommends to stockholders their vote for ratification of that appointment.
Coopers & Lybrand L.L.P. served in this capacity for the year 1997. Its
representative will be present at the Annual Meeting and will have an
opportunity to make a statement and be available to respond to appropriate
questions.
The appointment of auditors is approved annually by the Board. The
decision of the Board is based on the recommendation of the Audit Committee,
which reviews and approves in advance the audit scope, the types of non-audit
services, and the estimated fees for the coming year. The Committee also
reviews and approves proposed non-audit services to ensure that they will not
impair the independence of the accountants.
Before making its recommendation to the Board for appointment of Coopers &
Lybrand L.L.P., the Audit Committee carefully considered that firm's
qualifications as auditors for the Company. This included a review of its
performance in prior years, as well as its reputation for integrity and
competence in the fields of accounting and auditing. The Committee has
expressed its satisfaction with Coopers & Lybrand L.L.P. in all of these
respects.
. EMPLOYEE STOCK PURCHASE PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF THE EMPLOYEE STOCK
PURCHASE PLAN.
On May 27, 1997, the Company's Board of Directors approved an Employee
Stock Purchase Plan to be qualified under Section 423(b) of the Internal Revenue
Service. The CalMat Co. Employee Stock Purchase Plan (the "Plan") provides
employees with an opportunity to purchase Company Common Stock at a discount and
enjoy favorable tax treatment. The Plan is intended as a way for eligible
employees of the Company to commence or increase their ownership of shares of
the Company's Common Stock at a price that is less than the fair market value on
the date of purchase. The Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974. A Registration Statement Under the
Securities Act of 1933 on Form S-8 pertaining to the Plan was filed with the
Securities and Exchange Commission on May 29, 1997. The Board recommends the
Plan's approval in order for it to be qualified under Section 423. A summary of
the Plan is as follows. The Plan itself appears as EXHIBIT "A" to this Proxy
Statement. Copies of the Plan will be available at the Annual Meeting and can
also be obtained by making a written request to the Company's Secretary.
PLAN SUMMARY
. The Plan, which was effective July 1, 1997, is intended to be
qualified under Section 423 of the Internal Revenue Code and will be
in effect for ten (10) years, unless extended by the Board.
. The Plan must receive stockholder approval within twelve months of its
adoption. If not approved by the stockholders, it cannot qualify
under Internal Revenue Code Section 423; a non-qualified status would
have a bearing on the tax treatment to the participants and possibly
the Company's accounting treatment.
18
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
. All regular full-time employees are eligible; new employees have a
sixty-day waiting period. The Company sent letters to each union
notifying them of the Plan and that the Company would send union
members enrollment material if no objections from the unions were
received by June 2, 1997.
. Participant contributions are made through payroll deduction. The
minimum deduction per pay period is $5.00, the maximum deduction is
$25,000 worth of the fair market value of the Company's Common Stock
per Plan year.
. Shares of the Company's Common Stock are purchased each quarter, at
eighty-five percent (85%), a fifteen percent (15%) discount, of the
lower of the Company's stock price at the beginning of a calendar
-----
quarter or the end of the quarter.
. The record keeper/custodian maintains account share balances and
issues quarterly statements. In-service withdrawal of whole shares is
made when requested; the minimum withdrawal is $1,000 in value or the
entire balance, if less than $1,000. Distributions of all shares are
effected as soon as possible following the end of each quarter. There
is no interest paid on cash balances.
. Plan participants are not taxed until the disposition of the shares,
which must be held for a minimum of two years in order to realize
long-term capital gains tax treatment.
. The Plan can purchase up to 500,000 shares of the Company's Common
Stock on the open market.
. The Plan is administered by an Administrative Committee appointed by
the Company's Board of Directors and comprised of Company employees.
. In June 1997, all Company employees were mailed an announcement of the
Plan, together with the Plan's prospectus and enrollment
documentation.
. 1998 STOCK OPTION PLAN FOR OFFICERS, DIRECTORS AND KEY EMPLOYEES OF CALMAT
CO.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF THE 1998 STOCK
OPTION PLAN.
The Company has two outstanding stock option plans: The 1990 Stock Option
Plan for Executive and Key Employees of CalMat Co. (the "1990 Plan") and the
Amended and Restated 1993 Stock Option Plan for Officers, Directors and Key
Employees of CalMat Co. (the "1993 Plan"), approved by the Company's
stockholders on April 25, 1990 and April 27, 1994, respectively. Under these
plans, 600,000 shares and 900,000 shares, respectively, of the Company's Common
Stock were authorized for grants by the Compensation Committee to key employees
as incentive and non-qualified stock options. All options have an exercise
price equal to the fair market value at the date of grant. There are presently
approximately 65 executives or other key employees of the Company or its
subsidiaries eligible to receive incentive stock options and non-qualified stock
options, and twelve independent directors of the Company who are eligible to
receive non-qualified stock options.
As of March 23, 1998, the number of shares of the Company's Common Stock
available for grant under the CalMat 1990 Plan and 1993 Plan were 26,309 and
57,288, respectively. In order that the Company may continue to obtain and
retain the services of directors and key professional, technical and managerial
employees, the Board of Directors believes that the Company should be in a
position to
19
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
continue to grant stock options. Accordingly, on March 24, 1998, the Board
adopted the 1998 Stock Option Plan for Officers, Directors and Key Employees of
CalMat Co. (the "Plan"), covering 1,000,000 shares of Common Stock. The Plan is
summarized below. The Board recommends the Plan's approval in order to
authorize the issuance of options to officers, directors and key employees
covering an aggregate of 1,000,000 shares of Common Stock. The summary of the
Plan below is qualified in its entirety by reference to the Plan itself, which
appears as EXHIBIT "B" to this Proxy Statement. Copies of the Plan will be
available at the Annual Meeting and can also be obtained by making a written
request to the Company's Secretary.
PLAN SUMMARY
GENERAL
The Plan authorizes the granting of "incentive stock options" (as defined
in Section 422 of the Internal Revenue Code (the "Code") and non-qualified stock
options.
SHARES SUBJECT TO THE PLAN
A maximum of 1,000,000 shares of the Company's Common Stock may be issued
upon exercise of options granted under the Plan. The Plan provides for
appropriate adjustments in the number and kind of shares subject to the Plan and
to outstanding options in the event of a stock split, stock dividend or certain
other similar changes in the Company's Common Stock and in the event of a
merger, reorganization, consolidation or certain other types of
recapitalizations.
If any option granted under the Plan expires or terminates without having
been exercised in full, the number of shares as to which such option was not
exercised prior to its expiration or cancellation may be again subject to the
Plan and available for regrant.
ADMINISTRATION OF THE PLAN
The Plan is to be administered by the Compensation Committee consisting of
at least two members of the Board of Directors, appointed from time to time (and
removable) by the Board of Directors. No person is eligible to serve on the
Compensation Committee unless such person is then a "non-employee director" as
defined by Rule 16(b)-3 under the Securities Exchange Act of 1934, as amended,
and is also an "outside director" for purposes of Section 162(m) of the Code.
Options may not be granted under the Plan to any member of the Compensation
Committee during the term of his or her membership on the Compensation Committee
except in accordance with the provisions of the Plan controlling the grant of
options to non-employee directors ("Independent Directors").
In addition to administering the Plan, the Compensation Committee is also
authorized to interpret the Plan and the options thereunder, to adopt such rules
for the administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules. The
Board of Directors, in its absolute discretion, may at any time exercise any and
all rights or duties of the Compensation Committee under the Plan, other than
the right to select employees for participation and to determine the timing,
pricing and amount of grants to employees under the Plan.
The full Board of Directors, acting by a majority of its members in office,
shall conduct the general administration of the Plan with respect to options
granted to independent directors.
Members of the Compensation Committee will receive such compensation for
their services as may be determined by the Board of Directors. All expenses and
liabilities that the members of the Compensation Committee incur in connection
with the administration of the Plan will be borne by the Company.
20
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
ELIGIBILITY TO RECEIVE OPTIONS
Any executive or other key employee of the Company or any corporation which
is then a parent corporation or subsidiary of the Company (as defined in the
Plan) will be eligible to be granted options. The Compensation Committee is
authorized to select from among eligible executive or other key employees the
individuals to whom options are to be granted and to determine the number of
shares to be subject to the options, whether such options are to be incentive
stock options or non-qualified stock options, and the terms and conditions of
the options, consistent with the Plan.
More than one option may be granted to an employee; provided, however, that
the aggregate number of shares which may be granted to any individual shall not
exceed 500,000 shares of Common Stock during any calendar year or in total.
Subject to such limitation, there is no restriction as to the number of options
or as to the maximum or minimum number of shares that may be granted to any one
employee under the Plan.
Independent Directors will be eligible only to receive non-qualified
options. During the term of the Plan, each then current Independent Director
will automatically be granted on January 25 of each year an option to purchase
3,000 shares of Common Stock. Each new Independent Director initially elected
on or before July 25 of a given year will automatically be granted an option to
purchase 3,000 shares of Common Stock on the date of his or her initial election
to the Board. Independent Directors initially elected after July 25 of any
given year will not receive an initial option grant until the next January 25.
TERMS OF OPTIONS
Each option shall be evidenced by a written stock option agreement (a
"Stock Option Agreement") executed by the optionee and an authorized officer of
the Company which shall contain such terms and conditions as the Compensation
Committee (or the Board of Directors, in the case of options to Independent
Director) shall determine, consistent with the Plan.
The price of the shares of Common Stock subject to both incentive stock
options and non-qualified stock options shall be set by the Compensation
Committee and must be at least 100% of the fair market value of the shares on
the date the option is granted; provided, however, in the case of an incentive
stock option, the price per share must be at least 110% of the fair market value
of such share on the date the option is granted, in the case of an individual
then owning (within the meaning of Section 424(d) of the Code) more than 10% of
the total combined voting power of all classes of the Company's stock (or the
stock of any subsidiary or any parent corporation); provided further, the price
of shares subject to options granted to Independent Directors shall equal 100%
of the fair market value of the shares on the date the option is granted,
without variation. For purposes of the Plan, the fair market value of a share
of the Common Stock as of a given date will be the closing price of a share of
Common Stock on the principal exchange on which such shares are then trading, if
any, on the trading day immediately preceding such date, or, if the shares are
not traded on such date, then on the next preceding trading date during which a
sale occurred.
Except as the Compensation Committee may otherwise provide, in
consideration of the granting of an option, the optionee must agree to remain in
the employ of the Company, a parent corporation or one of its subsidiaries (or
to serve as an Independent Director of the Company), for at least one year after
the option is granted (or until the next annual meeting of the stockholders of
the Company, in the case of an Independent Director).
The Compensation Committee (or the full Board of Directors, in the case of
options granted to Independent Directors) may provide, in the terms and
conditions of an option, that it will terminate upon the dissolution or
liquidation of the Company, the merger or consolidation of the Company by
another corporation, or the acquisition by another corporation of all or
substantially all of the Company's assets or 80% or more of the Company's then
outstanding voting stock; but, in such event, the Compensation
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
Committee must also give optionees the right to exercise their outstanding
options in full during some period prior to such event, even though the options
have not yet become fully exercisable.
No option or right granted under the Plan may be assigned or transferred by
the optionee, except (i) upon death or (ii) by gift or divorce decree to a
member of the optionee's immediate family, or a trust for the benefit of family
members. No option or interest or right therein or part thereof will be liable
for the debts, contracts or engagements of the optionee or the optionee's
successors in interest or will be otherwise subject to disposition by transfer,
alienation, pledge, encumbrance, assignment or any other means, whether
voluntary, involuntary or by operation of law.
The holders of options will not be, nor have any of the rights or
privileges of, a stockholder of the Company as to shares covered by the option
until such shares are issued by the Company and delivered to such holders.
The Compensation Committee (or the Board of Director, in the case of
options to Independent Directors), in its discretion, may impose such
restrictions on the transferability of shares purchasable upon exercise of an
option as it deems appropriate. Any such restriction shall be set forth in the
respective Stock Option Agreement and may be referred to on the certificates
evidencing such shares. The Compensation Committee may require the employee to
give prompt notice of any disposition of shares of Common Stock, acquired by
exercise of an incentive stock option, within two years from the date of
granting such option or one year after the transfer of such shares to such
employee. The Compensation Committee may require that the certificates
evidencing shares acquired by exercise of an incentive stock option refer to
such requirement to give prompt notice of disposition.
EXERCISE OF OPTIONS
During the lifetime of the optionee, the option may be exercised only by
such optionee, unless it has been transferred in accordance with the provisions
described above under "Terms of Options." Except in the case of death or
disability (within the meaning of Section 22(e)(3) of the Code), no option may
be exercised in whole or in part during the first six months after such option
is granted. Thereafter, options granted under the Plan will become exercisable
at such times and in such installments (which may be cumulative) as the
Compensation Committee shall provide in the terms of the option. The
Compensation Committee may determine to accelerate the time at which an option
becomes exercisable. To the extent that the aggregate fair market value of
stock with respect to which "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code) are
first exercisable during any calendar year (and all other incentive stock option
plans of the Company, any subsidiary and any parent corporation) exceeds
$100,000, such options shall be taxed as non-qualified options. The rule set
forth in the preceding sentence shall be applied by taking options into account
in the order in which they were granted. For this purpose, the fair market
value of the stock shall be determined as of the time the option with respect to
such stock is granted. Options granted to Independent Directors shall become
exercisable in cumulative annual installments of 25% on each of the first,
second, third and fourth anniversaries of the date of option grant, subject to
acceleration in the event of retirement.
Options may be exercised by compliance with certain prescribed procedures,
and the option price must be paid in full at the time of exercise. The option
price may be paid in cash or by check, by tendering Common Stock of the Company
with a fair market value on the date of delivery equal to the aggregate option
price, by tendering a full-recourse promissory note (in the case of options
granted to employees), or by a combination of these methods. Payment by
promissory note requires the consent of the Compensation Committee and is
permitted only where such an extension of credit is not prohibited by law. The
Compensation Committee will prescribe the form of such note and the security to
be given by the optionee, and such note will bear interest at such rate as to
preclude the imputation of interest under the Code. In no event will shares of
Common Stock be issued until the purchase price has been paid in full.
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
The Compensation Committee may, as a condition of the exercise of any
option or rights, require that the optionee deliver such representations and
documents as it deems necessary to effect compliance with applicable federal and
state securities laws and regulations. The Compensation Committee may also take
whatever action it deems appropriate to effect such compliance.
No option granted to any employee may be exercised to any extent by anyone
after the first to occur of the following events: (1) the expiration of ten
years from the date the option was granted, or (2) in the case of an incentive
stock option, five years from the date the option was granted in the case of any
optionee owning (within the meaning of Section 424(d) of the Code) more than 10%
of the total combined voting power of all classes of Company stock (or the stock
of any subsidiary or any parent corporation) at the time the incentive stock
option is granted, or (3) the expiration of one year from the date the
optionee's employment terminates by reason of death or disability, or the
expiration of three months from the date of an employment termination for any
reason other than death or disability (unless the optionee dies during this
three-month period); provided that any incentive stock option exercised more
than three months following termination of employment by reason of retirement,
or more than one year following termination of employment by reason of
disability, will be taxed, under the Code, as a non-qualified stock option. No
option granted to any Independent Director may be exercised to any extent by
anyone after the first to occur of the following events: (i) ten years from the
date of option grant, or (ii) three months from the date of termination of
directorship (for any reason other than death), or (iii) one year from the date
of such Independent Director's death. Subject to the foregoing, the
Compensation Committee shall provide, in the terms of each individual option,
when such option expires and becomes unexercisable; and the Compensation
Committee may provide in the terms of individual options that said options
expire immediately upon a termination of employment for any reason.
AMENDMENT AND TERMINATION OF THE PLAN
Amendments of the Plan to increase the aggregate share limit on the stock
which may be issued on exercise of options granted under the Plan (except for
adjustments resulting from stock splits, etc.), to extend the period during
which options may be granted or to make any other change that requires
stockholder approval under applicable laws or regulations, would each require
the approval of the Company's stockholders within twelve months before or after
such amendment. In all other respects, the Plan can be amended, modified,
suspended or terminated by the Board of Directors.
FEDERAL INCOME TAX CONSEQUENCES
The Plan is neither a qualified pension, profit sharing or stock bonus plan
under Section 401(a) of the Code nor an "employee benefit plan" subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended.
The following discussion is a general summary of the material U.S. federal
income tax consequences to U.S. participants in the Plan. The discussion is
based on the Code, regulations thereunder, rulings and decisions now in effect,
all of which are subject to change. The summary does not discuss all aspects of
federal income taxation that may be relevant to a particular participant in
light of such participant's personal investment circumstances. Also,
alternative minimum tax and state and local taxes are not discussed and may vary
from locality to locality.
NON-QUALIFIED STOCK OPTIONS
Holders of non-qualified stock options do not realize income as a result of
the grant of such an option, but normally realize compensation income upon
exercise of such an option to the extent that the fair market value of the
shares on the date of exercise of the option exceeds the aggregate option price.
The Company is entitled to a tax deduction (subject to the limits of Section
162(m) of the Code which limits the deductibility of certain compensation in
excess of $1,000,000), in an amount equal to the compensation income realized
by an optionee as a result of the exercise of a non-qualified stock option,
subject to tax withholding.
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
In the discretion of the Compensation Committee, in lieu of payment in cash
of withholding amounts, the optionee may, subject to certain restrictions, pay
all or a portion of the federal, state and local taxes, including FICA tax,
withheld in connection with the exercise of one or more non-qualified options
granted under the Plan, by electing (i) to have the Company withhold shares
subject to such non-qualified option, (ii) to deliver shares received in
connection with the exercise of such non-qualified option, or (iii) to deliver
other previously acquired shares, having a fair market value approximately equal
to the amount to be withheld.
The tax consequences resulting from the exercise of a non-qualified stock
option through delivery of already-owned Company shares are not completely
certain. In published rulings, the Internal Revenue Service has taken the
position that, to the extent an equivalent value of shares is acquired, the
employee will recognize no gain and the employee's basis in the stock acquired
upon such exercise is equal to the employee's basis in the surrendered shares,
that any additional shares acquired upon such exercise are compensation to the
employee taxable under the rules described above and that the employee's basis
in any such additional shares is their then-fair market value.
INCENTIVE STOCK OPTIONS
Holders of incentive stock options will not be considered to have received
taxable income upon either the grant of such an option or its exercise. Upon
the sale or other taxable disposition of the shares acquired upon the exercise
of an incentive stock option, the full amount of gain will normally be treated
as long-term capital gain if sale or other disposition of the shares has not
taken place within either (a) two years from the date of the grant of the option
or (b) one year from the date of exercise of the option. If the stock is sold
or otherwise disposed of before the one- or two-year period, the gain will be
taxed as ordinary income to the extent of the difference between the option
price and the fair market value of the shares on the date of the exercise of the
option; the balance of the gain, if any, will be taxed as a capital gain. If
the stock is disposed of at a loss before the expiration of the one- or two-year
period, the employee's ordinary income is limited to the amount realized, less
the option exercise price paid. The Company (or other employer corporation) is
entitled to a tax deduction (subject to the limits of Section 162(m) of the
Code) in the case of an incentive stock option only to the extent that an
optionee recognizes ordinary income with respect to such option. Thus, the
Company (or other employer corporation) will not be entitled to a tax deduction
in regard to stock acquired under an incentive stock option and held the
requisite one- and two-year periods. If an option originally granted as an
incentive stock option is exercised by the optionee more than three months after
the optionee's retirement or one year after the optionee's termination of
employment by reason of permanent and total disability, the option will be taxed
under the rules applicable to non-qualified stock options rather than incentive
stock options.
Upon the exercise of an incentive stock option, the amount by which the
fair market value of the purchased shares at the time of exercise exceeds the
option price will be an "item of tax preference" for purposes of computing the
optionee's alternative minimum tax for the year of exercise. If the shares so
acquired are disposed of in the same year, there should be no "item of tax
preference" arising from the option exercise. In addition, if an employee
transfers shares acquired upon the exercise of an incentive stock option to
acquire other shares in connection with the exercise of an incentive stock
option, the employee will recognize income from the transaction if the
transferred shares have not been held for the required holding periods.
The tax consequences resulting from the exercise of an incentive stock
option through delivery of already-owed shares of Common Stock are not
completely certain. In published rulings and proposed regulations, the Internal
Revenue Service has taken the position that generally the employee will
recognize no income upon such stock-for-stock exercise (subject to the
discussion above), that, to the extent an equivalent number of shares is
acquired, the employee's basis in the shares acquired upon such exercise is
equal to the employee's basis in the surrendered shares increased by any
compensation income recognized by the employee, that the employee's basis in any
additional shares acquired upon such exercise is zero and that any sale or other
disposition of the acquired shares within the one- or two-year period described
above will be viewed first as a disposition of the shares with the lowest basis.
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
. Other Business
The Company is not aware of any matters that may come before the Meeting
other than those referred to in the Notice of Annual Meeting of Stockholders.
If any other matters shall properly come before the Meeting, the persons named
in the accompanying form of Proxy intend to vote thereon in accordance with
their best judgment.
STOCKHOLDER PROPOSALS FOR 1999 PROXY
Stockholder proposals may be submitted for inclusion in the Company's 1999
proxy material after the Annual Meeting, but no later than 5:00 p.m. PST on
December 10, 1998. Proposals must be in writing and sent via registered,
certified or express mail to: Office of the Secretary of CalMat Co., 3200 San
Fernando Road, Los Angeles, California 90065. Facsimiles or other forms of
electronic submission will not be accepted.
PROXIES AND VOTING AT THE MEETING
The twelve nominees for director who receive a plurality of the votes cast
at the Annual Meeting in person or by proxy shall be elected. All other
proposals require a majority of the votes.
Each stockholder of record at the close of business on April 8, 1998, is
entitled to one vote for each share of Common Stock held. With respect to the
election of directors, stockholders have the right to cumulate votes and give
one candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which that stockholder's shares are
entitled, or to distribute such votes among as many candidates as the
stockholder determines. Stockholders who wish to cumulate their votes must so
indicate on the form of Proxy.
A majority of the stock issued and outstanding, represented in person or by
proxy, constitutes a quorum for the transaction of business at the Meeting. On
March 23, 1998, there were outstanding 23,775,479 shares of the Company's Common
Stock, $1 par value, all of which are one class.
Under the Company's By-laws and Delaware law, shares represented by proxies
that reflect abstentions or "broker non-votes" (i.e., shares held by a broker or
nominee which are represented at the Annual Meeting, but with respect to which
such broker or nominee is not empowered to vote on a particular proposal) will
be counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. To be elected, nominees must receive a
plurality of the votes cast by holders of Common Stock who are present and
entitled to vote, in person or by proxy, at the Annual Meeting. Accordingly,
abstentions or broker non-votes will not affect the election of the candidates
receiving the plurality of votes. All other proposals to come before the Annual
Meeting require the approval of a majority of the votes cast by holders of
Common Stock who are present with the power to vote. Abstentions as to a
particular proposal will have the same effect as votes against such proposal.
Broker non-votes, however, will have the effect of non-voted shares for purposes
of determining approval of such proposal and will not be counted as votes for or
against such proposal.
Shares cannot be voted unless the stockholder attends the meeting, returns
a signed Proxy Card, or designates a representative who attends the meeting and
votes the shares on behalf of the owner. Any stockholder giving a proxy may
revoke it at any time before it is voted.
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
Stockholders are encouraged to specify their choices by marking the
appropriate boxes on the enclosed Proxy Card. Shares will be voted in
accordance with such instructions. However, it is not necessary to mark any
boxes if you wish to vote in accordance with the Board of Directors'
recommendations; simply sign, date and return the Proxy Card in the enclosed
envelope.
Solicitation of proxies is being made by the Company by mail, in person and
by telecommunications. The cost thereof will be borne by the Company. In
addition, management has retained Georgeson & Company, Inc., to assist in
soliciting proxies for a fee of approximately $7,000 plus reasonable out-of-
pocket expenses. Brokerage houses, custodians, nominees and others who hold
stock in their names will be reimbursed for expenses incurred by them in sending
proxy materials to beneficial owners.
Paul Stanford
Secretary
Los Angeles, California
April 9, 1998
26
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
EXHIBIT "A"
CALMAT CO. EMPLOYEE STOCK PURCHASE PLAN
1. GENERAL.
The CalMat Co. Employee Stock Purchase Plan (the "Plan") is intended as a way
for eligible employees of CalMat Co. (the "Company") to commence or increase
their ownership of shares of CalMat Co.'s common stock ("Common Stock") at a
price that is less than the fair market value on the date of purchase. Once an
employee is enrolled as a participant in the Plan, his or her accumulated
payroll deductions will be used to purchase whole shares of Common Stock under
the terms of the Plan. The Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974.
It is the intention of the Company to have the Plan qualify as an "employee
stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"). The provisions of the Plan shall be construed so as to
extend and limit participation in a manner consistent with the requirements of
such section of the Code.
2. ADMINISTRATION.
(a) The Company's Board of Directors (the "Board") has appointed a committee
("Administrative Committee") to administer and interpret the Plan. The
Board has the sole discretion and authority to make changes in the
Administrative Committee, or to appoint itself to administer the Plan.
Until changed by further notice, any notices or communications to the
Administrative Committee should be directed to CalMat Co. Employee Stock
Purchase Plan Administrative Committee, Post Office Box 2950, Los Angeles,
California 90051, (213)258-2777, extension 3275. The Administrative
Committee will consist of employees of the Company unless otherwise
provided by the Board in its sole discretion.
(b) If an eligible employee decides to participate in the Plan, the
Administrative Committee, or its agent, will keep a continuous record of
participation and send the participant a statement of his or her account
under the Plan for each quarter.
(c) The number of shares credited to a participant's account under the Plan
will be shown on the participant's statement of account. Certificates for
any number of whole shares credited to a participant's account under the
Plan will be issued solely to the participant upon his or her written
request to the Administrative Committee and delivered to the Company's
address. Certificates for fractional share interests will not be issued.
(d) The Administrative Committee reserves the right to interpret and regulate
the Plan. The Administrative Committee may establish such procedures and
make such other provisions for the administration and operation of the Plan
as it deems appropriate to give effect to its purpose. The Administrative
Committee shall have full power and authority to (i) interpret and
administer the Plan and any instrument or agreement entered into under the
Plan; (ii) appoint such agents as it shall deem appropriate for the proper
administration of the Plan; (iii) determine the terms and conditions of
grants and Options under the Plan; and (iv) make any other determination
and take any other action that the Board deems necessary or desirable for
administering the Plan.
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
(e) The "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December
31st, except in the first Plan Year, which shall commence July 1, 1997.
(f) The Administrative Committee shall appoint a custodian to make purchases of
Common Stock as agent for the participants. The custodian will hold and
act as custodian of shares purchased under the Plan.
3. ELIGIBILITY.
(a) Except as provided in Sections 3 (b) and (c) below, as of July 1, 1997, the
effective date of the Plan, all regular, full-time employees of the Company
and of any subsidiary corporation (a "Subsidiary") that, along with the
Company, is a member of a controlled group of corporations (as defined in
Section 1563 of the Code), who have been so employed for at least 60 days
are eligible to participate in the Plan. Thereafter, each employee of the
Company or a Subsidiary will become eligible as of the first payroll period
of the Plan quarter immediately following 60 days of employment. For
purposes of the Plan, an employee is considered a full-time, regular
employee if the employee works at least 20 hours per week, including
vacations and approved leaves of absence, and has a job assignment that is
expected to exceed five months in duration.
(b) No employee shall be granted an Option under the Plan if the employee,
immediately after an Option is granted, owns or would own shares
representing 5% or more of the total combined voting power or value of all
classes of shares of stock of the Company or a Subsidiary. For purposes
of the foregoing limitation, the rules of Section 424(d) (relating to
attribution of stock ownership) of the Code shall apply in determining
share ownership, and stock which the employee may purchase under the
outstanding Options shall be treated as stock owned by the employee.
Further, if, pursuant to the terms of the Plan, an employee would be
granted an Option that violates Section 423(b)(8) of the Code, such Option
shall not be granted. Accordingly, no employee shall be granted an Option
under the Plan if the grant of such Option permits such employee rights to
purchase stock under all the employee stock plans of the Company and its
Subsidiaries to accrue at a rate which exceeds $25,000 of the fair market
value of the stock (determined at the time such Option is granted) for each
calendar year in which such Option is outstanding.
(c) For purposes of participation in the Plan, unless a participant's right to
re-employment following an approved leave of absence (a "Leave") is
guaranteed either by statute or by contract, a participant shall be deemed
to be an employee for the first 90 days of such Leave and such employee's
employment shall be deemed to have terminated at the close of business on
the 90th day of such Leave unless such employee shall have returned to
employment prior to the close of business on such 90th day. Termination by
the Company of any employee's Leave, other than termination of such Leave
on return to employment, shall terminate an employee's employment for
purposes of the Plan and shall terminate such employee's participation in
the Plan and right to exercise any Option granted under the Plan.
(d) Non-employee directors shall not be eligible to participate in the Plan.
4. ELECTION TO PARTICIPATE.
An eligible employee may become a participant in the Plan by completing the
enrollment form (and any other documents required by the Administrative
Committee) provided by the Company and returning such form(s) to the Company's
Employee Benefits department (or other department as shall be hereafter
designated by the Administrative Committee) on or before the date set therefor
by the Administrative Committee, which date shall be prior to the beginning of
each quarter. Enrollment forms will be furnished to eligible
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
employees at any time upon request to the Company. An eligible employee may
begin participation in the Plan as of the first day of any calendar quarter.
5. GRANT AND EXERCISE OF OPTIONS; INVESTMENT DATE.
(a) On the first business day of each quarter, a participant shall be deemed to
have been granted an Option to purchase a maximum number of shares of
Common Stock (an "Option") equal to $25,000 worth of Common Stock (based on
the fair market value of the Common Stock on such date of grant) less the
fair market value of shares previously purchased by such participant (based
on the fair market value of such shares on the Option grant date for such
shares).
(b) No Option granted shall have a term of more than three (3) months. At the
Investment Date for each quarter, each participant will be deemed to have
automatically exercised his or her Option to purchase, at the then
applicable Option Price (as defined in Section 7), that number of whole
shares of Common Stock as of such quarter's Investment Date, but not in
excess of the number of shares for which such Option was granted pursuant
to Section 5 (a). The "Investment Date" shall be the last business day of
each quarter ending March 31st, June 30th, September 30th and December
31st.
(c) During a participant's lifetime, Options held by a participant shall be
exercisable only by that participant.
6. PAYROLL DEDUCTIONS.
(a) After an enrollment form has been approved by the Company's Employee
Benefits department (or other department as shall be hereafter designated
by the Administrative Committee) and the authority for the payroll
deductions has been noted on the Company's payroll records, the Company
will withhold from a participant's paycheck the amount authorized by the
participant. The withholding will be made weekly or bi-weekly from the
paycheck ending in that period. The amounts withheld from all
participants' paychecks will be forwarded to the custodian to buy shares of
Common Stock for the accounts of all participants under the Plan on the
applicable quarter's Investment Date.
(b) The participant shall specify on the enrollment form the weekly or bi-
weekly amount to be withheld from his or her pay. Deductions must be
authorized in even multiples of $5.00 with a minimum of $5.00. No interest
will be paid on payroll deduction amounts. Participants may acquire up to
$25,000 worth of shares each Plan Year, which maximum shall be based on the
stock prices at the time an Option was granted pursuant to Section
423(b)(8) of the Code.
(c) The payroll deduction authorizations are effective for an indefinite period
of time, until the termination of the Plan. The amount of a participant's
payroll deductions may be revised, changed, suspended or terminated by the
participant at any time by written notice to the Company's Employee
Benefits department (or other department as shall be hereafter designated
by the Administrative Committee). A revised enrollment form shall be used
for these purposes. Commencement, revision or termination of deductions
will become effective as soon as practicable after an employee's request is
approved by the Company's Employee Benefits department (or other department
as shall be hereafter designated by the Administrative Committee).
(d) If a participant suspends contributions to the Plan pursuant to Section 6
(c), any money remaining in such participant's account shall be refunded as
soon as practicable after the revised enrollment form requesting such
suspension is received.
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
(e) If a participant goes on a Leave, such participant shall have the right to
elect: (i) to withdraw from the Plan pursuant to Section 11; or (ii) to
remain a participant in the Plan during such Leave, authorizing deductions
to be made from payments by the Company to the participant during such
Leave, but only to the extent that amounts payable by the Company to such
participant are sufficient to meet such participant's authorized Plan
deduction.
7. OPTION PRICE.
The price of the shares purchased with the participant's payroll deductions
("Option Price") will be 85% of the lower of the price of the first or last
business day of the quarter for Common Stock on the New York Stock Exchange as
reported in the morning edition of the Wall Street Journal for those dates. If
no trading occurs in the Common Stock on the above dates, the purchase price
will be the lower of the price on the nearest day following the beginning of the
quarter or on the nearest prior business day before the end of the quarter on
which sales of Common Stock are reported on the New York Stock Exchange. Any
fraction of a cent will be rounded up to the nearest whole cent. If the Common
Stock is not admitted to trading on any of the dates for which Option Prices of
the Common Stock are to be determined, then reference shall be made to the fair
market value of the Common Stock on such dates, as determined on such basis as
shall be established or specified for such purpose by the Administrative
Committee.
8. NUMBER OF SHARES PURCHASED.
On each Investment Date, accumulated payroll deductions from all participants
will be used to purchase the maximum number of whole shares of Common Stock for
the accounts of the participants. The number of shares credited to each
participant's account will depend on the amount of the participant's payroll
deductions and the Option Price of the shares as provided under Section 7.
9. STOCK.
(a) The maximum number of shares which shall be issued under the Plan shall be
500,000 shares. If the total number of shares for which Options are
exercised on any Investment Date exceeds the maximum number of shares for
the Plan, the Company shall make a pro rata allocation of the shares
available for delivery and distribution in a nearly uniform manner as shall
be practicable and as it shall determine to be equitable, and the balance
of payroll deductions credited to the account of each participant under the
Plan shall be returned to such participants as promptly as practicable.
(b) A participant will have no interest in stock covered by his or her Option
until such Option has been exercised.
10. FEES AND EXPENSES.
Participants will incur no brokerage commissions or service charges for
purchases made under the Plan.
11. WITHDRAWAL OF SHARES; TERMINATION OF EMPLOYMENT.
(a) A participant may withdraw shares of Common Stock from the Plan pursuant to
Section 8 at any time in whole or in part, but only once per quarter. To
withdraw shares from the Plan, a participant must notify the Administrative
Committee in writing of his or her withdrawal. The minimum amount which
may be withdrawn by a participant is $1,000 in fair market value of shares,
or the participant's entire account balance, if less.
30
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
(b) In the event a participant withdraws shares, or in the event of the
termination of the Plan, certificates for whole shares credited to the
account of the withdrawing participant, or all participants in the case of
a termination of the Plan, will be delivered the participant and a cash
payment will be made for the sale price of any fractional share interest
along with and any additional payroll deductions credited to the account of
the withdrawing participant but not previously used to purchase shares., or
all participants in the case of a termination of the Plan, but not used to
purchase shares. The Administrative Committee may establish such equitable
arrangements for the sale of fractional share interests as it shall deem
appropriate.
(c) Distribution of shares to a participant withdrawing shares will be made on
a "first-in first-out" basis as soon as practicable at the end of the
quarter in which the request for withdrawal of shares is approved.
(d) A former participant who has withdrawn shares from the Plan pursuant to
this Section 11 may re-enter the Plan at any succeeding quarterly entry
date provided the eligibility requirements of Section 3 have been
satisfied. No new payroll deductions will be made from the paychecks of
the employee unless the participant completes a new enrollment form
providing for such deductions.
(e) A participant who has made a hardship withdrawal from a CalMat-sponsored
401(k) plan is prohibited from making payroll deductions for the purpose of
purchasing stock under this Plan for 12 months following the receipt of the
hardship distribution.
(f) In the event of a participant's retirement, death or termination of
employment, certificates for whole shares credited to the account of the
participant will be delivered to the participant or the participant's
representative and a cash payment will be made for the sale price of any
fractional share interest and any additional payroll deductions credited to
the account of such participant at the end of the current quarter. The
Administrative Committee may establish such equitable arrangements for the
sale of fractional share interests as it shall deem appropriate.
(g) A participant on a Leave shall, subject to the election made by such
participant pursuant to Section 6 (d), continue to be a participant in the
Plan so long as such participant is on a continuous Leave. Unless a
participant's right to re-employment following a Leave is guaranteed either
by statute or by contract, a participant who has been on a Leave for more
than 90 days and, who, therefore, is not an employee for the purpose of the
Plan, shall not be entitled to participate in any offering commencing after
the 90th day of such Leave.
12. VOTING AND TENDERING OF SHARES.
(a) Each participant will have authority to direct the Administrative Committee
in the manner of voting the number of shares held in his or her account.
(b) In the event that a tender offer occurs with respect to shares held under
the Plan, the Administrative Committee shall give each participant the
opportunity to direct, on a confidential basis, whether the whole shares
held in the participant's account shall be tendered. The Administrative
Committee shall tender fractional shares as nearly as possible in the same
proportion as whole shares.
(c) Whole shares as to which no direction is received from participants will
not be voted or tendered, as the case may be.
31
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
13. CASH DIVIDENDS.
Cash dividends paid on shares credited to a participant's account will be paid
to the participant as soon as practicable following the dividend payment date.
Dividend amounts payable to participants will be allocated to participants'
accounts and rounded to the nearest whole cent in the case of fractional share
interests.
14. STOCK DIVIDENDS AND STOCK SPLITS.
Any shares distributed by the Company as a stock dividend on shares credited to
a participant's account under the Plan, or upon any split of such shares, will
be credited to the participant's account.
15. AMENDMENT AND TERMINATION.
The Plan shall terminate on July 1, 2007, the tenth (10th) anniversary of the
effective date of the Plan, unless the term is renewed or extended. The Board
reserves the right to suspend, modify or terminate the Plan at any time;
provided, however, that the Board shall not, without the approval of the
stockholders of the Company: (i) increase the maximum number of shares which may
be issued under the Plan (other than increases merely reflecting a change in
capitalization, such as a stock dividend or stock split), or (ii) change the
designation of corporations whose employees may be offered Options under the
Plan. Any such suspension, modification or termination shall not affect a
participant's right to shares of Common Stock already purchased (except that the
Company may take any action necessary to comply with applicable law).
16. NON-TRANSFERABILITY.
Neither payroll deductions credited to a participant's account nor any rights
with regard to the exercise of an Option under the Plan may be assigned,
transferred, pledged, or otherwise disposed of in any way by the participant,
other than by will or the laws of descent and distribution.
17. REPORTS.
Each participant will receive a statement of his or her account for each
quarter. Participants will also receive communications sent to other
stockholders, including the Annual Report of the Company, and its Notice of
Annual Meeting and Proxy Statement. Participants will receive information
necessary for reporting income realized by them under the Plan.
18. TAX WITHHOLDING.
All taxes withheld with respect to the amount of each participant's payroll
deductions under the Plan will be deducted from the participant's salary and
will not reduce the amounts used to purchase shares.
19. AGREEMENT AS TO SALES OF SECURITIES FOR CERTAIN EMPLOYEES.
If, at the time of the purchase of any shares, in the opinion of counsel for the
Company, it is necessary or desirable, in order to comply with any applicable
laws or regulations relating to the sale of the securities, that the participant
will agree to purchase the shares for investment only and not with any present
intention to resell the same and that the participant will dispose of such
shares only in compliance with such laws and regulations, the participant will,
upon the request of the Company, execute and deliver to the Company an agreement
to such effect.
32
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
20. NO EMPLOYMENT RIGHT.
Neither this Plan nor any action taken under the Plan shall be construed as
giving any right to any individual to be retained as an officer or employee of
the Company.
21. GOVERNMENT AND OTHER REGULATIONS.
The obligation of the Company to purchase stock shall be subject to all
applicable laws, rules, and regulations, and to such administrative approvals by
any government agencies as may be deemed necessary or appropriate by the
Administrative Committee. The Plan is intended to comply with Rule 16b-3 under
the Securities Exchange Act of 1934, as amended. Any provision inconsistent
with such Rule shall be inoperative and shall not affect the validity of the
Plan. The Plan shall be subject to any provision necessary to assure compliance
with federal and state securities laws including non-transferability
restrictions.
22. INDEMNIFICATION.
Each person who is or at any time serving as a member of the Board or the
Committee shall be indemnified and held harmless by the Company against and from
(i) any loss, cost, liability, or expense that may be imposed on or reasonably
incurred by such person in connection with or resulting from any claim, action,
suit, or proceeding to which such person may be a party or in which such person
may be involved by reason of any action or failure to act under this Plan; and
(ii) any and all amounts paid by such person in satisfaction of judgment any
such action, suit, or proceeding relation to this Plan. Each person covered by
this indemnification shall give the Company an opportunity at its own expense,
to handle and defend the same before such person undertakes to handle and defend
the same on such person's own behalf. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the charter or bylaws of the Company as a matter
of law, or otherwise, or any power that the Company may have to indemnify such
person or hold such person harmless.
23. RELIANCE ON REPORTS.
Each member of the Board or the Administrative Committee shall be fully
justified in relying or acting in good faith upon any report made by the
independent public accountants of the Company, and upon any other information
furnished in connection with this Plan. In no event shall any person who is or
shall have been a member of the Board or the Administrative Committee be liable
for any determination made or the action taken or any omission to act in
reliance upon any such report or information, or for any action taken, including
the furnishing of information, or failure to act, if in good faith.
24. GOVERNING LAW.
All matters relating to the Plan shall be governed by the laws of the state of
Delaware without regard to the principles of conflict of laws, except to the
extent preempted by the laws of the United States.
25. RELATIONSHIP TO OTHER BENEFITS.
No payment under this Plan shall be taken into account in determining any
benefits under any pension, retirement, profit sharing, or group insurance plan
of the Company.
26. EXPENSES.
The expenses of implementing and administering this Plan shall be borne by the
Company.
33
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
27. TITLES AND HEADINGS.
The titles and headings of the paragraphs in this Plan are for convenience of
reference only, and in the event of any conflict, the text of this Plan, rather
than such titles or headings, shall control.
28. USE OF PROCEEDS.
Payroll deductions under the Plan shall constitute general funds of the Company
until the Investment Date.
29. NON-EXCLUSIVITY OF PLAN.
Neither the adoption of the Plan by the Board nor the submission of the Plan to
the stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including without limitation, the
granting of stock options or stock purchase arrangements other than under the
Plan, and such arrangements may be applicable either generally or only in
specific cases.
30. STOCKHOLDER APPROVAL.
This Plan was adopted by the Board on May 27, 1997 and is subject to the
approval of the CalMat Co. stockholders. The Plan is intended to qualify as an
Employee Stock Purchase Plan within the meaning of Section 423 of the Code. If
the stockholders do not approve the Plan, the Company will implement and operate
the Plan under the provisions of Section 83 of the Code.
34
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
EXHIBIT "B"
1998 STOCK OPTION PLAN
FOR OFFICERS, DIRECTORS AND KEY EMPLOYEES
OF
CALMAT CO.
CALMAT CO., a corporation organized under the laws of the State of Delaware,
hereby adopts this 1998 Stock Option Plan for Officers, Directors and Key
Employees of CalMat Co. The purposes of this Plan are as follows:
(1) To further the growth, development and financial success of the
Company by providing additional incentives to certain of its officers,
directors and key Employees who have been or will be given responsibility
for the management or administration of the Company's business affairs, by
assisting them to become owners of capital stock of the Company and thus to
benefit directly from its growth, development and financial success.
(2) To enable the Company to obtain and retain the services of the
type of professional, technical and managerial employees and directors
considered essential to the long-range success of the Company by providing
and offering them an opportunity to become owners of capital stock of the
Company under options, including options that are intended to qualify as
"incentive stock options" under Section 422 of the Internal Revenue Code of
1986, as amended.
ARTICLE I
DEFINITIONS
-----------
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The masculine pronoun shall include the feminine and neuter and the singular
shall include the plural, where the context so indicates.
Section 1.1 - Board
- ----------- -----
"Board" shall mean the Board of Directors of the Company.
Section 1.2 - Code
- ----------- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3 - Committee
- ----------- ---------
"Committee" shall mean the Stock Option Committee of the Board, appointed
as provided in Section 6.1.
Section 1.4 - Company
- ----------- -------
"Company" shall mean CalMat Co., a Delaware corporation.
35
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
Section 1.5 - Director
- ----------- --------
"Director" shall mean a member of the Board.
Section 1.6 - Employee
- ----------- --------
"Employee" shall mean any employee (as defined in accordance with the
Regulations and Revenue Rulings then applicable under Section 3401(c) of the
Code) of the Company, or of any corporation which is then a Parent Corporation
or a Subsidiary, whether such employee is so employed at the time this Plan is
adopted or becomes so employed subsequent to the adoption of this Plan.
Section 1.7 - Incentive Option
- ----------- ----------------
"Incentive Option" shall mean an Option which qualifies under Section 422
of the Code and which is designated as an Incentive Option by the Committee.
Section 1.8 - Independent Director
- ----------- --------------------
"Independent Director" shall mean a member of the Board who is not an
Employee of the Company.
Section 1.9 - Non-Qualified Option
- ----------- --------------------
"Non-Qualified Option" shall mean an Option which is not an Incentive
Option and which is designated as a Non-Qualified Option by the Committee.
Section 1.10 - Officer
- ------------ -------
"Officer" shall mean an officer of the Company, any Parent Corporation or
any Subsidiary.
Section 1.11 - Option
- ------------ ------
"Option" shall mean an option to purchase capital stock of the Company,
granted under the Plan. "Options" includes both Incentive Options and Non-
Qualified Options.
Section 1.12 Optionee
- ------------ --------
"Optionee" shall mean an Employee or Independent Director to whom an Option
is granted under the Plan.
Section 1.13 - Parent Corporation
- ------------ ------------------
"Parent Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
Company then owns stock possessing
36
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
Section 1.14 - Plan
- ------------ ----
"Plan" shall mean this 1998 Stock Option Plan for Officers, Directors and
Key Employees of CalMat Co.
Section 1.15 - Secretary
- ------------ ---------
"Secretary" shall mean the Secretary of the Company.
Section 1.16 - Securities Act
- ------------ --------------
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.17 - Subsidiary
- ------------ ----------
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
Section 1.18 - Termination Of Directorship
- ------------ ---------------------------
"Termination of Directorship" shall mean the time when an Optionee who was
an Independent Director ceases to be a director of the Company for any reason,
including, but not by way of limitation, a termination by resignation, failure
to be elected, death or retirement. The Board, in its absolute discretion,
shall determine the effect of all other matters and questions relating to
Termination of Directorship.
Section 1.19 - Termination Of Employment
- ------------ -------------------------
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Optionee and the Company, a Parent Corporation or a
Subsidiary is terminated for any reason, with or without cause, including, but
not by way of limitation, a termination by resignation, discharge, death or
retirement, but excluding terminations where there is a simultaneous
reemployment by the Company, a Parent Corporation or a Subsidiary. The
Committee, in it absolute discretion, shall determine the effect of all other
matters and questions relating to Termination of Employment, including, but not
by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for good cause, and all questions of whether
particular leaves of absence constitute Terminations of Employment; provided,
however, that, with respect to Incentive Options, a leave of absence shall
constitute a Termination of Employment if, and to the extent that, such leave of
absence interrupts employment for the purposes of Section 422(a)(2) of the Code
and the then applicable Regulations and Revenue Rulings under said Section.
37
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
ARTICLE II
SHARES SUBJECT TO PLAN
----------------------
Section 2.1 - Shares Subject To Plan
- ----------- ----------------------
The shares of stock subject to Options shall be shares of the Company's
$1.00 par value Common Stock. The aggregate number of such shares which may be
issued upon exercise of Options shall not exceed 1,000,000. The aggregate
number of such shares with respect to which Options may be granted to any
individual during any calendar year or in total shall not exceed 500,000. To
the extent required by Section 162(m) of the Code, shares which may be issued
upon exercise of Options which expire or are cancelled (whether pursuant to
Section 3.3(b) or otherwise) shall continue to be counted against this
limitation.
Section 2.2 - Unexercised Options
- ----------- -------------------
If any Option expires or is cancelled without having been fully exercised,
the number of shares subject to such Option but as to which such Option was not
exercised prior to its expiration or cancellation may again be optioned
hereunder, subject to the limitations of Section 2.1.
Section 2.3 - Changes In Company's Shares
- ----------- ---------------------------
In the event that the outstanding shares of Common Stock of the Company are
hereafter changed into or exchanged for a different number or kind of shares or
other securities of the Company, or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, stock dividend or combination of shares, appropriate adjustments shall
be made by the Committee in the number and kind of shares for the purchase of
which Options may be granted, including adjustments of the limitations in
Section 2.1 on the maximum number and kind of shares which may be issued on
exercise of Options, and appropriate adjustments shall be made by the Board in
the number and kind of shares for the purchase of which Options are granted to
Independent Directors under Section 3.3(c).
ARTICLE III
GRANTING OF OPTIONS
-------------------
Section 3.1 - Eligibility
- ----------- -----------
Any executive or other key Employee of the Company or of any corporation
which is then a Parent Corporation or a Subsidiary shall be eligible to be
granted Options, except as provided in Sections 3.2 and 6.1(a). Each
Independent Director of the Company shall be eligible to receive Options at the
times and in the manner set forth in Section 3.3(c).
Section 3.2 - Qualification Of Incentive Options
- ----------- ----------------------------------
No Incentive Option shall be granted unless such Option, when granted,
qualifies as an "incentive stock option" under Section 422 of the Code. Options
granted under the Plan to Independent Directors do not qualify as "incentive
stock options" under Section 422 of the Code.
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CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
Section 3.3 - Granting Of Options
- ----------- -------------------
(a) The Committee shall from time to time, in its absolute discretion:
(1) Determine which Employees are executive or other key Employees
and select from among the executive or other key Employees (including those
to whom Options have been previously granted under the Plan) such of them as
in its opinion should be granted Options; and
(2) Determine the number of shares to be subject to such Options
granted to such selected executive or other key Employees, and determine
whether such Options are to be Incentive Options or Non-Qualified Options;
and
(3) Determine the terms and conditions of such Options, consistent
with the Plan.
(b) Upon the selection of an executive or other key Employee to be granted
an Option, the Committee shall instruct the Secretary to issue such Option and
may impose such conditions on the grant of such Option as it deems appropriate.
(c) During the term of the Plan, each then current Independent Director
shall automatically be granted, on January 25 of each year, an Option to
purchase 3,000 shares of Common Stock (subject to adjustment as provided in
Section 2.3). When a person is initially elected to the Board and is then an
Independent Director, and the date of such initial election is on or before July
25 of that year, each such new Independent Director automatically shall be
granted an Option to purchase 3,000 shares of Common Stock (subject to
adjustment as provided in Section 2.3) on the date of his or her election to the
Board. A person initially elected to the Board as an Independent Director whose
initial election occurs after July 25 of that year will not receive an initial
Option grant pursuant to the preceding sentence. Members of the Board who are
Employees of the Company who subsequently retire from the Company and remain on
the Board will not receive an initial Option grant pursuant to the second
preceding sentence, but to the extent they are otherwise eligible, will receive
after retirement from the Company Options as described in the first sentence of
this Section 3.3(c). All the foregoing Option grants authorized by this Section
3.3(c) are subject to stockholder approval of the Plan at the 1998 Annual
Meeting of Stockholders.
ARTICLE IV
TERMS OF OPTIONS
----------------
Section 4.1 - Option Agreement
- ----------- ----------------
Each Option shall be evidenced by a written Stock Option Agreement, which
shall be executed by the Optionee and an authorized Officer of the Company and
which shall contain such terms and conditions as the Committee (or the Board, in
the case of Options granted to Independent Directors) shall determine,
consistent with the Plan. Stock Option Agreements evidencing Incentive Options
shall contain such terms and conditions as may be necessary to qualify such
Options as "incentive stock options" under Section 422 of the Code.
39
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
Section 4.2 - Option Price
- ----------- ------------
(a) The price of the shares subject to each Option shall be set by the
Committee; provided, however, that the price per share shall be not less than
100% of the fair market value of such shares on the date such Option is granted;
provided, further, that, in the case of an Incentive Option, the price per share
shall not be less than 110% of the fair market value of such shares on the date
such Option is granted in the case of an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company, any Subsidiary or any
Parent Corporation; and provided, further, that the price of the shares subject
to each Option granted to an Independent Director shall equal 100% of the fair
market value of such shares on the date such Option is granted, without
variation hereunder.
(b) For purposes of the Plan, the fair market value of a share of the
Company's stock as of a given date shall be:
(1) the closing price of a share of the Company's stock on the
principal exchange on which shares of the Company's stock are then trading,
if any, on the day previous to such date, or, if shares were not traded on
the day previous to such date, then on the next preceding trading day during
which a sale occurred; or
(2) if such stock is not traded on an exchange but is quoted on
NASDAQ or a successor quotation system, (i) the last sales price (if the
stock is then listed as a National Market Issue under the NASD National
Market System) or (ii) the mean between the closing representative bid and
asked prices (in all other cases) for the stock on the day previous to such
date as reported by NASDAQ or such successor quotation system; or
(3) if such stock is not publicly traded on an exchange and not
quoted on NASDAQ or a successor quotation system, the mean between the
closing bid and asked prices for the stock, on the day previous to such
date, as determined in good faith by the Committee (or the Board, in the
case of Options granted to Independent Directors); or
(4) if the Company's stock is not publicly traded, the fair market
value established by the Committee (or the Board, in the case of Options
granted to Independent Directors) acting in good faith.
Section 4.3 - Commencement Of Exercisability
- ----------- ------------------------------
(a) Except in the case of death or disability (within the meaning of
Section 22(e)(3) of the Code), no Option may be exercised in whole or in part
during the six months after such Option is granted.
(b) Subject to the provisions of Sections 4.3(a), 4.3(c), 4.3(d) and 7.3,
Options shall become exercisable at such times and in such installments (which
may be cumulative) as the Committee shall provide in the terms of each
individual Option; provided, however, that Options granted to Independent
Directors shall become exercisable in cumulative annual installments of 25% on
each of the first, second, third and fourth anniversaries of the date of Option
grant, and the term
40
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
of each such Option shall be ten years, except that any Option granted to an
Independent Director may by its terms become immediately exercisable in full
upon the retirement of the Independent Director in accordance with the Company's
retirement policy applicable to directors; and provided, further, that by a
resolution adopted after an Option is granted the Committee may, on such terms
and conditions as it may determine to be appropriate and subject to Sections
4.3(c), 4.3(d) and 7.3, accelerate the time at which such Option or any portion
thereof may be exercised.
(c) No portion of an Option which is unexercisable at Termination of
Employment or Termination of Directorship shall thereafter become exercisable.
(d) To the extent that the aggregate fair market value of stock with
respect to which "incentive stock options" (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by an Optionee during any calendar year (under the Plan and all
other incentive stock option plans of the Company, any Subsidiary and any Parent
Corporation) exceeds $100,000, such options shall be taxed as Non-Qualified
Options. The rule set forth in the preceding sentence shall be applied by
taking options into account in the order in which they were granted. For
purposes of this Section 4.3(d), the fair market value of stock shall be
determined as of the time the option with respect to such stock is granted.
Section 4.4 - Expiration Of Options
- ----------- ---------------------
(a) No Option granted to an Employee may be exercised to any extent by
anyone after the first to occur of the following events:
(1) The expiration of ten years from the date the Option was granted;
or
(2) In the case of an Incentive Option granted to an Optionee owning
(within the meaning of Section 424(d) of the Code), at the time the
Incentive Option was granted, more than 10% of the total combined voting
power of all classes of stock of the Company, any Subsidiary or any Parent
Corporation, the expiration of five years from the date the Incentive Option
was granted; or
(3) Except in the case of any Optionee who dies, who retires in
accordance with the terms of a Company retirement plan or who is disabled
(within the meaning of Section 22(e)(3) of the Code), the expiration of
three months from the date of the Optionee's Termination of Employment for
any reason other than such Optionee's death unless the Optionee dies within
said three-month period; provided, however, that any Incentive Option
exercised more than three months following Termination of Employment by
reason of retirement or more than one year following Termination of
Employment by reason of disability may be taxed, under the Code, as a Non-
Qualified Option.
(b) Subject to the provisions of Section 4.4(a), the Committee shall
provide, in the terms of each individual Option granted to an Employee, when
such Option expires and becomes unexercisable; and (without limiting the
generality of the foregoing) the Committee may provide in the terms of
individual Options that said Options expire immediately upon a Termination of
Employment for any reason.
(c) No Option granted to an Independent Director may be exercised to any
extent by anyone after the first to occur of the following events:
(1) The expiration of ten years from the date the Option was granted;
or
41
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
(2) The expiration of three months from the date of the Optionee's
Termination of Directorship for any reason other than such Optionee's death
unless the Optionee dies within said three-month period; or
(3) The expiration of one year from the date of the Optionee's death.
Section 4.5 - Consideration
- ----------- -------------
In consideration of the granting of the Option, the Optionee shall agree,
in the written Stock Option Agreement, to remain in the employ of the Company, a
Parent Corporation or a Subsidiary (or to serve as an Independent Director of
the Company) for a period of at least one year after the Option is granted (or
until the next Annual Meeting of Stockholders of the Company, in the case of an
Independent Director). Nothing in this Plan or in any Stock Option Agreement
hereunder shall confer upon any Optionee any right to continue in the employ of
or as a Director of the Company, any Parent Corporation or any Subsidiary or
shall interfere with or restrict in any way the rights of the Company, its
Parent Corporations and its Subsidiaries, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
cause.
Section 4.6 - Adjustments In Outstanding Options
- ----------- ----------------------------------
In the event that the outstanding shares of the stock subject to Options
are changed into or exchanged for a different number or kind of shares of the
Company or other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend or
combination of shares, the Committee (or the Board, in the case of Options
granted to Independent Directors) shall make an appropriate and equitable
adjustment in the number and kind of shares as to which all outstanding Options,
or portions thereof then unexercised, shall be exercisable, to the end that
after such event the Optionee's proportionate interest shall be maintained as
before the occurrence of such event. Such adjustment in an outstanding Option
shall be made without change in the total price applicable to the Option or the
unexercised portion of the Option (except for any change in the aggregate price
resulting from rounding-off of share quantities or prices) and with any
necessary corresponding adjustment in Option price per share; provided, however,
that, in the case of Incentive Options, each such adjustment shall be made in
such manner as not to constitute a "modification" within the meaning of Section
424(h)(3) of the Code. Any such adjustment made by the Committee or the Board
shall be final and binding upon all Optionees, the Company and all other
interested persons.
Section 4.7 - Merger, Consolidation, Acquisition, Liquidation
- ----------- Or Dissolution
-----------------------------------------------
The Committee (or the Board, in the case of Options granted to Independent
Directors) shall provide by the terms of each Option that, upon or in connection
with the merger or consolidation of the Company with or into another
corporation, the acquisition by another corporation or person of all or
substantially all of the Company's assets or 80% or more of the Company's then
outstanding voting stock or the liquidation or dissolution of the Company, such
Option shall either (a) be (1) assumed or (2) replaced by a substitute option
granted by any successor corporation or (b) be or become exercisable, for a
minimum of 30 days prior to such event, as to all shares covered thereby,
notwithstanding anything to the contrary in Section 4.3(a), Section 4.3(b)
and/or any installment provisions of such Option, but subject to Section 4.3(d).
42
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
ARTICLE V
EXERCISE OF OPTIONS
-------------------
Section 5.1 - Person Eligible To Exercise
- ----------- ---------------------------
Except as provided in Section 7.1, during the lifetime of the Optionee,
only the Optionee may exercise an Option granted to him or her, or any portion
thereof. After the death of the Optionee, any exercisable portion of an Option
may, prior to the time when such portion becomes unexercisable under Section 4.4
or Section 4.7, be exercised by a personal representative or by any person
empowered to do so under the deceased Optionee's will or under the then
applicable laws of descent and distribution.
Section 5.2 - Partial Exercise
- ----------- ----------------
At any time and from time to time prior to the time when any exercisable
Option or exercisable portion thereof becomes unexercisable under Section 4.4 or
Section 4.7, such Option or portion thereof may be exercised in whole or in
part; provided, however, that the Company shall not be required to issue
fractional shares and the Committee (or Board, in the case of Options granted to
Independent Directors) may, by the terms of the Option, require any partial
exercise to be with respect to a specified minimum number of shares.
Section 5.3 - Manner Of Exercise
- ----------- ------------------
An exercisable Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when such Option or such portion becomes unexercisable under Section
4.4 or Section 4.7:
(a) Notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee (or Board, in the case of Options granted to
Independent Directors); and
(b) Full payment for the shares with respect to which such Option or
portion is thereby exercised:
(1) In cash or by check; or
(2) By delivery of shares of the Company's Common Stock owned by
the Optionee duly endorsed for transfer to the Company with a fair market
value (as determined under Section 4.2(b)) on the date of delivery equal to
the aggregate Option price of the shares with respect to which such Option
or portion is thereby exercised; or
(3) With the consent of the Committee, by delivery of a full
recourse promissory note bearing interest (at least such rate as shall then
preclude the imputation of interest under the Code or any successor
provision) and payable upon such terms as may be prescribed by the
Committee. The Committee may also prescribe the form of such note and the
security to be given for such note. No Option may, however, be exercised by
delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law; or
43
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
(4) By means of any combination of the consideration provided in
the foregoing subsections (1), (2) and (3); and
(c) Such representations and documents as the Committee or Board, in
its absolute discretion, deems necessary or advisable to effect compliance
with all applicable provisions of the Securities Act and any other federal
or state securities laws or regulations. The Committee or Board may, in its
absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer orders to transfer
agents and registrars; and
(d) In the event that the Option or portion thereof shall be
exercised pursuant to Section 5.1 by any person or persons other than the
Optionee, appropriate proof of the right of such person or persons to
exercise the Option or portion thereof.
Section 5.4 - Conditions To Issuance Of Stock Certificates
- ----------- --------------------------------------------
The shares of stock issuable and deliverable upon the exercise of an
Option, or any portion thereof, may be either previously authorized but unissued
shares or issued shares which have then been reacquired by the Company. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory
body, which the Committee or Board shall, in its absolute discretion, deem
necessary or advisable; and
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee or Board shall, in its
absolute discretion, determine to be necessary or advisable; and
(d) The payment to the Company (or other employer corporation) of all
amounts which it is required to withhold under federal, state or local law
in connection with the exercise of the Option, which in the discretion of
the Committee or the Board may be in the form of the consideration used by
the Optionee to pay the exercise price under Section 5.3(b); and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Committee or Board may establish from time to
time for reasons of administrative convenience.
Section 5.5 - Rights As Stockholders
- ----------- ----------------------
An Optionee shall not be, nor have any of the rights or privileges of, a
stockholder of the Company in respect of any shares purchasable upon the
exercise of any part of an Option unless and until certificates representing
such shares have been issued by the Company to such Optionee.
44
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
Section 5.6 - Transfer Restrictions
- ----------- ---------------------
The Committee (or Board, in the case of Options granted to Independent
Directors), in its absolute discretion, may impose such restrictions on the
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate. Any such restriction shall be set forth in the respective
Stock Option Agreement and may be referred to on the certificates evidencing
such shares. The Committee may require the Employee to give the Company prompt
notice of any disposition of shares of stock, acquired by exercise of an
Incentive Option, within two years from the date of granting such Option or one
year after the transfer of such shares to such Employee. The Committee may
direct that the certificates evidencing shares acquired by exercise of an Option
refer to such requirement to give prompt notice of disposition.
ARTICLE VI
ADMINISTRATION
--------------
Section 6.1 - Stock Option Committee
- ----------- ----------------------
(a) The Stock Option Committee shall consist of at least two Directors,
appointed by and holding office at the pleasure of the Board. No Options may be
granted to any member of the Committee, except pursuant to Section 3.3(c),
during the term of his membership on the Committee. No person shall be eligible
to serve on the Committee unless he is then both (i) a "non-employee director"
within the meaning of Rule 16b-3 which has been adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, if and as such
Rule is then in effect, and (ii) an "outside director" for purposes of Section
162(m) of the Code.
(b) Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee shall be filled by the Board.
Section 6.2 - Duties And Powers Of Committee
- ----------- ------------------------------
It shall be the duty of the Committee to conduct the general administration
of the Plan in accordance with its provisions. The Committee shall have the
power to interpret the Plan and the Options and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. Any such
interpretations and rules in regard to Incentive Options shall be consistent
with the basic purpose of the Plan to grant "incentive stock options" within the
meaning of Section 422 of the Code. Notwithstanding the foregoing, the full
Board, acting by a majority of its members in office, shall conduct the general
administration of the Plan with respect to Options granted to Independent
Directors. In its absolute discretion, the Board may at any time and from time
to time exercise any and all rights and duties of the Committee under the Plan,
other than the right to select Employees for participation and to determine the
timing, pricing and amount of grants to Employees under Sections 3.3(a), 3.3(b),
4.2 and 4.3 of the Plan.
Section 6.3 - Majority Rule
- ----------- -------------
The Committee shall act by a majority of its members in office. The
Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.
45
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
Section 6.4 - Compensation; Professional Assistance;
- ----------- Good Faith Actions
--------------------------------------
Members of the Committee shall receive such compensation for their services
as members as may be determined by the Board. All expenses and liabilities
incurred by members of the Committee or Board in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Board, the Company and
its Officers and Directors shall be entitled to rely upon the advice, opinions
or valuations of any such persons. All actions taken and all interpretations
and determinations made by the Committee or the Board in good faith shall be
final and binding upon all Optionees, the Company and all other interested
persons. No member of the Committee or the Board shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Options, and all members of the Committee and the Board shall be
fully protected by the Company in respect to any such action, determination or
interpretation.
ARTICLE VII
OTHER PROVISIONS
----------------
Section 7.1 - Options Not Transferable
- ----------- ------------------------
No Option or interest or right therein or part thereof shall be liable for
the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that nothing in this Section 7.1 shall
prevent transfers (i) by will or by the applicable laws of descent and
distribution or (ii) by gift or by domestic relations order to a member of the
Optionee's immediate family, as defined in Rule 16a-1 under the Securities
Exchange Act of 1934, as amended, or to a trust for the exclusive benefit of, or
any other entity owned solely by, such members, provided that an Option that has
been so transferred shall continue to be subject to all of the terms and
conditions of the Option as applicable to the original holder, and the
transferee shall execute any and all documents requested by the Committee in
connection with the transfer, including without limitation to evidence the
transfer and to satisfy any requirements for an exemption for the transfer under
applicable federal and state securities laws.
Section 7.2 - Amendment, Suspension Or Termination Of The Plan
- ----------- ------------------------------------------------
The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Board. However,
without approval of the Company's stockholders given within 12 months before or
after the action by the Board, no action of the Board may, except as provided in
Section 2.3, increase any limit imposed in Section 2.1 on the maximum number of
shares which may be issued on exercise of Options, extend the limit imposed in
this Section 7.2 on the period during which Options may be granted or make any
other change that requires stockholder approval under applicable laws, rules or
stock exchange regulations. Neither the amendment, suspension nor termination
of the Plan shall, without the consent of the holder of the Option, alter or
impair any rights or obligations under any Option theretofore granted. No
Option may be granted during any period of suspension nor after termination of
the Plan, and in no event may any Option be granted under this Plan after the
first to occur of the following events:
46
<PAGE>
CALMAT CO. NOTICE OF 1998 MEETING AND PROXY STATEMENT
(a) The expiration of ten years from the date the Plan is adopted by
the Board; or
(b) The expiration of ten years from the date the Plan is approved by
the Company's stockholders under Section 7.3.
Section 7.3 - Approval Of Plan By Stockholders
- ----------- --------------------------------
This Plan will be submitted for the approval of the Company's stockholders
within 12 months after the date of the Board's initial adoption of the Plan.
Options may be granted prior to such stockholder approval; provided, however,
that such Options shall not be exercisable prior to the time when the Plan is
approved by the stockholders; provided, further, that if such approval has not
been obtained at the end of said 12-month period, all Options previously granted
under the Plan shall thereupon be cancelled and become null and void.
Section 7.4 - Effect Of Plan Upon Other Option And
- ----------- Compensation Plans
------------------------------------
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent Corporation or any
Subsidiary. Nothing in this Plan shall be construed to limit the right of the
Company, any Parent Corporation or any Subsidiary (a) to establish any other
forms of incentives or compensation for employees or directors of the Company,
any Parent Corporation or any Subsidiary or (b) to grant or assume options
otherwise than under this Plan in connection with any proper corporate purpose,
including, but not by way of limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, firm or
association.
Section 7.5 - Titles
- ----------- ------
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
47
<PAGE>
(SIDE 1)
- --------------------------------------------------------------------------------
CALMAT CO.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS ON MAY 27, 1998
I hereby constitute and appoint A. Frederick Gerstell and Paul Stanford, and
each of them, with full power of substitution and revocation to each, as my
proxies, to vote all shares of Common Stock of CalMat Co. held or owned by me at
the Annual Meeting of Stockholders to be held at the Omni Los Angeles Hotel &
Centre, 930 Wilshire Boulevard, Los Angeles, California, at 10:00 a.m., on
Wednesday, May 27, 1998, and at any and all adjournments thereof, upon the
matters listed on the reverse side of this card. I (we) hereby (1) revoke any
proxy given prior to this one, (2) acknowledge receipt of the Notice of the
Annual Meeting of Stockholders and the Proxy Statement, both dated April 9,
1998, and (3) authorize and confirm any action taken by the designated proxies,
or their substitutes, or any one of them, by virtue of this authorization.
Election of Directors. Nominees:
John C. Argue, Arthur Brown, Denis R. Brown, Harry M. Conger, Rayburn S.
Dezember, A. Frederick Gerstell, Richard A. Grant, Jr., Edward A. Landry, Thomas
L. Lee, Thomas M. Linden, Georgia R. Nelson and Stuart T. Peeler
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES ON
THE REVERSE SIDE OF THIS PROXY CARD. YOU NEED NOT MARK ANY BOXES IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXY
CANNOT BE VOTED UNLESS YOU SIGN AND RETURN THIS CARD.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
- --------------------------------------------------------------------------------
<PAGE>
(SIDE 2)
- --------------------------------------------------------------------------------
[X] Please mark your 3232
votes as in this
example.
CalMat's Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
- --------------------------------------------------------------------------------
FOR all nominees listed WITHHELD AUTHORITY
1. Election of Twelve (12) (except as marked to the to vote for all
Directors (see reverse). contrary below) nominees listed
To withhold authority to vote [_] [_]
for any individual nominee,
write that nominee's name:
To cumulate votes, please indicate distribution:
- ----------------------------- ------------------------------------------------
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of
Appointment of Auditors [_] [_] [_]
3. Approval of Employee
Stock Purchase Plan [_] [_] [_]
4. Approval of 1998 Stock
Option Plan [_] [_] [_]
- --------------------------------------------------------------------------------
5. To transact such other business as may properly come before the Meeting or
any adjournment thereof. If other matters shall properly come before the
meeting, the proxies named shall vote in accordance with their best
judgment.
- --------------------------------------------------------------------------------
SIGNATURE(S) ____________________ ______________________ DATE ________________
NOTE: Please date this proxy and sign exactly as your name(s) appear(s). If
the stock is held jointly, each owner must sign. Personal
representatives, trustees, guardians, and others signing in a
representative capacity should give full title. If you attend the
Meeting, you may withdraw this proxy and vote in person.
- --------------------------------------------------------------------------------
